Opposition Brief — Shalala v. Schoolcraft

JUL 14 1993

Nos. one and 92-1395

OFFICE OF THE Cit-r

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1992

DONNA E. SHALALA, SECRETARY OF HEALTH AND

HUMAN SERVICES, PETITIONER,

Vv.

DANIEL J. SCHOOLCRAFT, ET AL., RESPONDENTS.

the Disability Determination Services; R. JANE

BROWN, in her official capacity as Commissioner of

the Minnesota Department of Jobs and Training, PETITIONERS.

(¥) WALTER ROERS, in his official capacity as Director of

Vv.

DANIEL J. SCHOOLCRAFT, ET AL., RESPONDENTS.

On Petitions For Writs Of Certiorari To The

United States Court Of Appeals For The Eighth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

LAURIE N. DAVISON

Counsel of Record

M. FRANCESCA CHERVENAK

KATHLEEN M. DAVIS

Legal Aid Society of Minneapolis

430 First Avenue North, Suite 300

Minneapolis, Minnesota 55401-1780

(612) 332-1441

BARBARA J. KUHN

Legal Aid Society of Minneapolis

2929 Fourth Avenue South

Minneapolis, Minnesota $5408

(612) 827-3774

Counsel for Respondents

QUESTIONS PRESENTED

l. Whether 42 U.S.C. § 1983 authorizes respondents to sue officials of a

State agency, created pursuant to state law, who make initial and reconsideration decisions

on claims for Social Security disability benefits, for violations of federal law and the United

States Constitution.

2. Whether. even if respondents could not proceed under 42 U.S.C. §

1983, the federal district court nevertheless had jurisdiction to consider respondents’ claims

against the state agency Officials.

= Whether the court of appeals was correct in waiving exhaustion of

administrative remedies for a class of Social Security disability claimants, where, absent

waiver. the challenged practices would never be subject to judicial scrutiny, where requiring

exhaustion would cause irreparable harm. and where respondents’ claims were collateral to

their claims for disability benefits.

TABLE OF CONTENTS

Page

CORES TING FIRED on vee ces cen eth beck nnd Sead area Cee aee eee

py) CR ht PSs 2) ye Sry pore wae heres ore are Pe ii

TABLE GF ALTTIIOIRE Tie «onc ncn cece c sew es san an wens cunieee nee hese

PE EH oak pk aoe Se Rana eee eae ee eee eee ee eee ee eee 2

DUR OE hk cee ei cs cece recededeed eee Seas ee ee ee 2

REASONS FOR DENYING THE WRIT ...............-.--.. 7

I. Ns ck pos ee ee eee eee eee 7

Il. The Petitions Should be Denied as to the Section 1983 Questions .

A. The Color of State Law Issue Does Not Warrant Review S

B. The Court Should Not Issue a Writ of Certiorari to Decide

Whether Congress Clearly Intended to Preclude a Remedy

oO rere are ee re

Ill. The Petition Should Be Denied as to the Section 405(h) Question 21

IV. The Petition Should be Denied as to Waiver of Exhaustion

Administrative Remedies Under Section 405(g). ... . 6

ei eh ft | Ewe erry weer an yee ee re ee ae a 28

TABLE OF AUTHORITIES

Page

Cases

fnemes ¥. Wremiberger, SS F.2d 259 (Gth Cir. 1977). eee cc wnsnuen ee

Albnght v. Longview Police Dept., 884 F.2d 835 (Sth Cir. 1989) ............00008. 14

ey queens, Gao F.2d SZ (3d Cir. 1989)... 0. wee cca cc ecuwnsteueen 24

Boning v. Sullivan, No 2:91-0429 (S.D.W.Va.) . 0 0. cc cw ew cc cece 12

Bowen. v. City of New York, 476 US. 467 (1986) .. 2.2... 0c. cen ween wcccce 8, 22-28

Brotherhood of Locomotive Firemen & Enginemen v. Bangor

en Met. SO GL, SO? CEO) ona 6s bd awe eda cee ee 15

eee eens. @Or 0.5. GR? (IN7R) og cn ca vols oe eee eee 18

City of New York v. Heckler, 578 F. Supp. 1109

RN CRI 60-0 bres 2500-5 a Wn mS x We Ach wk Ce

City of New York v. Heckler, 742 F.2d 729 (2d Cir. 1984) .. 0.0... 0... eee eee 27

Cohen v. Beneficial Industrial Loan Corp.,

ee eee yh hs hy ne eA Wea wk 48 £4 ge RK be Ree eee 27

Council for Periodical Distributors Ass’ns v. Evans,

See ae ee OE Oy PT gg ok vas nck Ky eds bee ple ee 12

Department of Banking v. Pink, 317 U.S. 264 (1942)... 0.0. ee ee eee 2

eee Mee, Gee Foe Oe C8 Cer. 1081)... occa cs cwdcasvyeo ben 9, 10, 13

Golden State Transit Corp. v. Los Angeles, 493 U.S. 103 (1989) .......0.0..... 18, 19

Grant v. Shalala, No. 91-5675 (3d Cir. March 5, 1993) ...............00000eee. 23

H. Christiansen & Sons v. City of Duluth, 225 Minn. 475 (1948) .........0.0.0.... 10

Hamilton-Brown Shoe Co. v. Wolf Bros., 240 U.S. 251 (1916) 22.0.0 ..000.0000000.. 15

pen ¥: Corre SOE TIS OIG (TOD) x vcs cu ce va wie ce ea eek 1]

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

rr ek cc eck wwe wae ew ees ten wee ee ewes 24

International Society for Krishna Consciousness v. Air Canada,

I, ne oc sts we en ee che we ese weeee yews l4

ee I re Or Oe FPP) og eee eee ee eee enes 26

wane Fv. ee, Gee wae Geo (and Ch, T9BZ) 4... i ccc 12

Kuehner v. Schweiker, 717 F.2d 813 (3d Cir. 1983),

vacated and remanded on other grounds, 469 U.S. 977 (1984) ......... 10, 11, 13

Marcus v. Sullivan, 926 F.2d 604 (7th Cir. 1991) 1.2... 2... ee ee 24

OE Gt) er a 24-27

Mental Health Ass'n v. Heckler, 720 F.2d 965 (8th Cir. 1983) .......0......... + 2d

Middlesex County Sewerage Authority v. National Sea

ee SAS Te) ra 17-20

Ee a ere 16

oe Ne Re ek 6. | a 15, 16

New York v. Sullivan, 906 F.2d 910 (2d Cir. 1990) ............0. 02.00.00. eee os

Newman v. Piggie Park Enterprises, 390 U.S. 400 (19608) 2.0.0... 6.6 ee

Patsy v. Bd. of Regents of State of Florida, 457 U.S. 496 (1982) 20.26 i2

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

remanded 476 U.S. 1167 (1986),

on remand, 804 F.2d 456 (8th Cir. 1986),

eee eG a NO 9) ie era rarer A.

Rg PEN OR eG a re .. 19

Schweiker v. Chilicky, 487 U.S. 412 (1988) ............... 202 eee ee eee

ee Oy EE, OE Jc, PE CESO) 0 oc ec ete ees lene ta GPa

eae Owe, Ge Wie. GET CIFID) on cee ees Pioan

ee Rd |) a 23

Seer ee ESI 5 TU a ee Ce) 6 eas ocx say week ewan s 17, 19

Se 6 ee, Bee Ch eee a eae a Ce ee wk ec oS eae eae be ea ees 15

OEY Ws Sake Sh PR CEP) os ce cece eee ch Geen exces Be pee 26

Wilder v. Virginia Hospital Assoc.. 496 U.S. 498 (1990) 2... 2 ee ee ee eee 18, 21

Wright v. Roanoke Redevelopment & Hous. Auth.,

og et a rn rar eras ae wer ere 18, 19

Statutes and Regulations

MEI OME cn ak has ke oe Saw ae ene ha he oes eae Oe eT 10. 11

aS ae | a ra er ae area ee re meee ere es oy wee ary ee: 17

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Bek ta a re re ry erry eer re ee rene Ar 12

ge Co a err eT ee ee eee ere re ee ere ee passim

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Se ee UND bP Glas OEE TOUS ee a RGR Re RES PENA Caer Reka ee ee ees 15

Oe Mae ERED eae Redes Ain eed eee Ee CE HE ASS EAA ee Ee KS 12

Oe Rie AD ee ree a eek Re Ree kee hay Coe eee a tae eee 26

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G2 Wks @ IOUS. a eae en een cds wane eect eres eens reese eee 1]

ao CER. Ft. S04, sult. FP, Ann: 1, Lasting 120) cca nk coc vce eee yee onccase 6, 7

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oe ks | ee rr ee re, er gEeN 2a jrz et on weet, 10

rn gee ca ey epee ee rere 12

Ee nt Nera wth as Ween Bee GS OR OWE 8 OR Oe KE 10

es i EE a ka ss Rn ees a Gd Monee Oe ite ae bens eae 12

oe eB) ee eee nana eae See rere ee 6

es Ce: Se NEI ia ace S aracyian WC Oe ce oh a eee aoe Week a es 14, 15

Miscellaneous

Staff of House Comm. on Ways & Means. 102d Cong., 2d Sess.. Overview of Entitlement

Programs 61 (Comm. Print 1992) .............. EAN Rater are SEN yar 4, 23, 26

Vi

Nos. 92-1392 and 92-1395

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1992

DONNA E. SHALALA, SECRETARY OF HEALTH AND

HUMAN SERVICES, PETITIONER,

¥.

DANIEL J. SCHOOLCRAFT, ET AL... RESPONDENTS.

WALTER ROERS. in his official capacity as Director ot

the Disability Determination Services: R. JANE

BROWN. in her official capacity as Commissioner of

the Minnesota Department of Jobs and Training, PETITIONERS.

7;

DANIEL J. SCHOOLCRAFT, ET AL... RESPONDENTS.

On Petitions For Writs Of Certiorari To The

United States Court Of Appeals For The Eighth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents respectfully submit this brief in opposition to the petitions for

writs of certiorari submitted on behalf of the Secretary of Health and Human Services

(Secretary) and the state agency officials.

JURISDICTION

The Secretary and the state petitioners each filed applications for an extension

of time to file their petitions for a writ of certiorari. Justice Blackmun granted those

applications in two separate orders, extending the time to February 8, 1993.

The Solicitor General, "on behalf of the Secretary," filed a second application

for an extension of time to file her petition. Application at 1 (January 1993). On February

1, 1993, Justice Blackmun granted the Secretary’s application, extending the time for the

Secretary to file her petition to February 22, 1993. The Secretary's petition was subsequen'ly

filed timely.

The state petitioners, unlike the Secretary, never tiled an application for an

extension beyond February 8, 1993, although the Secretary’s application notes that: “The

Attorney General of Minnesota joins in this [the Secretary's] application. /d. (emphasis

added). In any event, Justice Blackmun’s February 1, 1993 order, by its terms, extended only

the Secretary’s time to file.

The state petitioners took no further action to obtain an extension beyond

February 8, 1993. Their petition, which was filed on February 22, 1993, was untuumely an

should be dismissed on this ground alone. Department of Banking v. Pink, 317 U.S. 204, 208

(1942).

STATEMENT

Respondents brought this class action for declaratory and injunctive relief on

behalf of applicants and recipients for Social Security disability benetits and Supplemental

Security Income, who allege that they are unable to work in whole or in part because ot

alcoholism or some other drug dependency, and whose claams had been demed at the initial

or reconsideration level of the administrative appeal process. C.A. App. 13.' They alleged

that the standard used by the state Disability Determination Service (DDS) to evaluate their

claims differed from the standard used by the Secretary’s Administrative Law Judges (ALJs),

and was inconsistent with the Social Security Act as it had been interpreted by the Eighth

Circuit in Adams v. Weinberger, 548 F.2d 239 (8th Cir. 1977). C.A. App. 21. They also

claimed that the state agency failed to gather and develop evidence fully as required by the

Act. Jd. Finally, they asserted that the Secretary’s policies and procedures violated their

rights to equal protection and due process guaranteed by the United States Constitution.

Id. at 21-22.

When respondents filed their complaint in January, 1990, they sued only the

Secretary of Health and Human Services: they did not assert any claims against the state

agency Officials. Jd. at 11. The evidence then available to respondents suggested that the

challenged policies were attributable to the Secretary. The Secretary, for example, had

advised the ALJs in her Office of Hearings and Appeals of the Eighth Circuit’s decisions

governing the evaluation of alcoholism, but had never similarly advised state agency

employees.” Subsequent discovery suggested, however, that some of the systemic problems

relating to the gathering and development of evidence were attributable to the state agency.

'C.A. App. refers to the Joint Appendix filed in the court of appeals. C.A. Supp. App.

refers to the Supplemental Appendix attach.d to respondent Schoolcraft’s Eighth Circuit

brief. — -

* The official manual used by the Office of Hearings and Appeals advised ALJs in

Minnesota about significant 8th Circuit case law. C.A. Supp. App. 14-16. In stark contrast,

supervisory employees at DDS testified that they had not been aware of the Adams decision,

and had not been instructed by SSA that, in evaluating a claim of disability on the basis of

substance abuse, they must determine whether a claimant can voluntarily control his use of

the substance as required by Adams. C.A. App. 369-63, 367-71.

Since the district court had ordered that all amendments be filed before April 1, 1990,

respondents amended their complaint to assert a claim against state agency officials. Docket

No. 15, C.A. App. 4; C.A. App. 88.

Although the petitioners describe the multi-level administrative review

procedures in some detail, they omit two important points. First, two-thirds of all disability

claimants do not appeal beyond the initial and reconsideration decisions made by the state

DDS officials. Staff of House Comm. on Ways & Means, 102d Cong.. 2d Sess., Overview

of Entitlement Programs 61 (Comm. Print 1992) (hereafter 1992 Green Book). Second.

disability claimants must wait an average of 14 months for an ALJ decision. C.A. App. 331.

259-262. Thus, even those claimants who do appeal are seriously harmed by erroneous state

agency decisions.

The petitioners misrepresent respondents’ position in two ways. First. with

respect to the underlying claim, respondents do not allege that “a clatmant must be

conclusively deemed disabled once it is determined that he or she ‘is addicted and has lost

the ability to voluntarily control the use of alcohcl/drugs.”” Secretary's Petition tor a Writ

of Certiorari (hereafter Sec. Pet.) at 9. Respondents have clearly acknowledged that the

Social Security Act requires "a causal relationship between an impairment and the inability

to work." Appellants’ C.A. Bric: at 7. Respondents claim that a claimant ts eligible tor

disability benefits if he or she is addicted, has lost the ability to voluntariiy control the use

of alcohol, and as a result, is unable to work.

Second, the Secretary continues to argue that "[rJespondents asserted that the

errors allegedly made by Minnesota DDS were being corrected by ALJs.” See. Pet. at 21.

This is patently false. Respondents repeatedly argued the contrary in both the district court

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reconsideration levels. The ALJ did not consider either whether DDS had adequately

gathered and developed the record or whether DDS had applied the proper standards whet

evaluating Mr. Drumbeater’s disability.

Moreover, the ALJ hearing did not provide any means for preventing

recurrence of the irreparable harm Mr. Drumbeater suffered while waiting for his hearing

When DDS emplovees review his continuing eligibility, they will once again applv the very

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practices and procedures that respondents challenge in this litigation

Finally, the petitioners fail to mention that, while the appeal was pending

the Eighth Circuit, the Secretary published proposed amendments to the ac ¢

impairment regulations. 56 Fed. Reg. 33,130 (July 18, 1991 The listing for subst

addiction disorders is currently a "reference" listing. 20 C.F.R. Pt. 404, subpt. P, App

Listing 12.09. Instead of identifying clinical signs and symptoms of a substance addict

disorder, it refers to other mental impairments that are to be used to determine

claimant who suffers from a substance addiction is eligible tor disability Denelits

The proposed Listing 12.09, renamed "substance dependence disorders, Is

longer a reference listing. Rather, for the first time, 1t lists the signs and svmptoms whic

substantiate the presence of a disabling substance dependence disorder 56 Fed. Reg

33,142. When the new Listing 12.09 is adopted, there will at long last be a sper

regulation that establishes a framework for finding a claimant

4

alcoholism alone.

4-> . , "

The Secretary has already published a new listing tor substance dependence disorders

in children which parallels proposed Listing 12.09. 20 C.P.R

Listing 112.09 (1992).

Pt. 404, Subp. P, App

In addition to creating a separate listing for substance dependence disorders,

the new listing will require consideration of the ability to control the use of alcohol or other

substance, as required by Adams. One of the listed signs of a substance dependence

disorder in the proposed regulation is: “Two or more unsuccesstul efforts to cut down or

control use." Jd. (to be codified at 20 C.F.R. Part 404, subpt. P, App. 1, Listing 12.09). The

promulgation of this proposed rule in final form, together with other changes in policy that

have taken place during the pendency of this litigation, will go a long way toward resolving

the underlying claims.

In a similar vein, the court of appeals noted that, in oral argument, the

government had claimed that the Secretary currently complies with the legal standards and

procedures respondents deem to be applicable. Sec. App. 18a.° The Court then stated:

"[T]he Secretary can easily remedy this dispute and save everyone a great deal of time and

expense by entering into a consent judgment in the district court specifically stating the

applicable standards are to be applied to each stage of the claim evaluation process.” /d

REASONS FOR DENYING THE WRIT

I. Introduction

The decision of the court of appeals is in most respects fully consistent with

all of the other circuits and, in all respects, fully consistent with decisions of this Court. Only

with respect to one narrow issue does the decision below vary from any other circuit, namely,

whether state agency officials who make disability determinations act under color of state

law for the purposes of 42 U.S.C. § 1983. The petitioners attempt to magnify this narrow

“Sec. App.” refers to the Secretary’s Appendix to her Petition tor a Writ of Certiorari.

issue into one of major proportions and dire consequences for the entire Social Security

system, in the hopes of convincing this Court to grant review and, in essence, overrule Bowen

v. City of New York, 476 U.S. 467 (1986). As we show more tully below, whether or not the

state agency officials act under color of state law, respondents have stated valid claims

against the state petitioners over which the district court had jurisdiction. Even it the

question relating to section 1983 were of greater significance, the current posture of this case

makes it inappropriate for review. Rather, the Court should permit the case to be

remanded to the district court for completion of discovery and trial, or, as we have indicated

a likely early settlement.

Whether or not the Court grants the petitions for certiorari with respe.

section 1983 question, the Court should deny review with respect to waiver of exhaus

administrative remedies under 42 U.S.C. § 405(g). The Secretary concedes that there

split in the circuits as to this question. To the contrary, the appellate courts h

this Court’s unanimous decision in City of New York without difficulty or disagreement

Secretary's contention that the Eighth Circuit’s decision is contrary to City of New York ts

wholly without merit.

Il. The Petitions Should be Denied as to the Section 1983 Questions.

A. The Color of State Law Issue Does Not Warrant Review

The Eighth Circuit recognized that respondents had stated a claim against the st

petitioners under 42 U.S.C. § 1983. "Claimants allege that these state officers in their official

capacities, acting under color of state law, violated tederal law and the United States

Constitution by failing to apply the proper criteria.” Sec. App. 17a. On the basis of this

allegation, the court concluded that there was federal question Jur isdiction to consider these

claims. /d. In reaching this conclusion, the court rejected the state petitioners’ argument

that 42 U.S.C. § 40S(h) bars federal question jurisdiction over them. /d. at 16a. The Court

noted that section 405(h) applies only to officers and employees of the federal government,

and held that the state officials were neither. /d. at 17a. In a footnote to this last holding,

the Eighth Circuit stated that "we disagree with the holding of the Second Circuit that the

state defendants are acting solely as agents of the United States. See Ellis v. Blum, 643 F.2d

68 (2d Cir. 1981)." Id.

In Ellis v. Blum, supra, the Second Circuit, like the Eighth Circuit here, was

reviewing a dismissal] for lack of jurisdiction. Although analyzing the issue differently, the

Second Circuit agreed with the Eighth Circuit that section 405(h) did not preclude federal

question jurisdiction over the plaintiffs’ claims. Based upon the record before it, however,

I

of tederal law and

4

the court concluded that the state officials were acting under co

therefore could not be sued under section 1983.

For the following reasons, this Court should not grant the petitions tor

certiorari to resolve this minor disagreement between the circuits.

l. If the state petitioners do not act under color of state law, respondents

can proceed with their claims against them under 42 U.S.C. §405(g). The petitioners each

emphasize the close relationship between the Secretary and the state agency. Although

neither expressly claims that there is an agency relationship, the state petitioner argues that

"there is a seamless integration of the DDS into the benefit adjudication process under the

Act with truly plenary control of the DDS by the SSA." State’s Pet. at 13. The Secretary

argues that the state officials "act on behalf of the Secretary and therefore stand in the shoes

of her officers or employees ...." Sec. Pet. at 21 (citing Ellis v. Blam). Both petitioners

7]

rely on the federal regulations which provide that a decision of the state agency at the initial

and reconsideration levels is the determination of the Secretary. 20 C.F.R. §§ 404.1613(a).

416.1013(a). Under the petitioners’ reasoning, respondents could bring their claims against

~

the state agency officials pursuant to 42 U.S.C. §405(g).” -

Furthermore, the supplemental jurisdiction statute now provides an alternative

basis for bringing claims against the state DDS agency as a pendent party in federal court.

28 U.S.C. § 1367(a) (effective Dec. 1, 1990). Social Security claimants can bring a state law

claim that DDS is violating federal law as part of a related action in tederal court against

the Secretary under section 405(g). See, e.g.. H. Christiansen & Sons v. Cuy of Duluth, 225

Minn. 475, 483-84 (1948) (recognizing a state law cause of action for violations of a tederal

statute); see also Kuehner v. Schweiker, 717 F.2d 813, 828 n.17 (3d Cir. 1983) (Becker. J

concurring), vacated and remanded on other grounds, 469 U.S. 977 (1984). Given these

alternative bases of jurisdiction, the petitioners’ claims of the disastrous consequences to the

Social Security system unless this Court issues a writ of certiorari simply have no merit

The insignificance of the state action issue in this context is further

demonstrated by the fact that both the Second Circuit in Ellis and the Third Circuit

]

Kuehner v. Schweiker, supra, tound that there was indeed tederal question jurisdicuon undet

28 U.S.C. § 1331 over the Social Security claimants’ causes of action against the state agency

oificials.. Thus, the bottom line reached by the Eighth Circuit, namely, that Social Security

°The requirement of a "final" decision would be waived for the same reasons it was

waived by the Eighth Circuit as to respondents’ claims against the Secretary. See infra Part

IV, pp. 22-28.

‘The Second Circuit found 1331 jurisdiction because the claims against the state agency

were separate and distinct from the claims against the Secretary. Ellis, 643 F.2d at 76. In

(continued... )

10

claimants could bring a cause of action against state agency officials challenging the

procedures that they use to evaluate claims of disability, is fully consistent with the result

reached by all of the circuits that have considered the issue. The Social Security disability

system remains fully operational, despite the fact that state agency officials have been and

continue to be subject to suit.

2. Since respondents can proceed with their claims against the state

petitioners even if they did not act under color of state law, whether this case is "cert.

worthy" depends in part on the differences between bringing the claims against the state

petitioners under section 1983 and section 405(g). There are two differences: the first

relates to attorney's fees, and the second to the doctrine of exhaustion of administrative

remedies. As we show below, neither is significant.

In any action brought pursuant to 42 U.S.C. § 1983, a prevailing plaintiff has

a claim for attorney's fees under 42 U.S.C. § 1988. Section 1988 attorney's fees are generally

awarded to prevailing plaintiffs, unless “special circumstances would render the award

unjust." Hensley v. Eckerhart. 461 U.S. 424, 429 (1983) (quoting Newman v. Piggie Park

Enterprises, 390 U.S. 400, 402 (1968)). Whether or not fees would ultimately be awarded

against the state agency is a matter of pure speculation. If after a decision on the merits,

it is determined that the state agency was merely complying with the Secretary’s instructions,

the state agency could argue that fees under section 1988 should be denied because the state

’(...continued )

Kuehner, the Third Circuit found 133] jurisdiction over the claim that the state agency,

consistent with the Secretary’s instructions, was violating the Social] Security Act. 717 F.2d

813, 816-17 (3d Cir. 1983), vacated and remanded on other grounds, 469 U.S. 977 (1984).

Here, discovery is likely to establish that some of the claims against the state agency are

distinct from the claims against the Secretary.

1]

was free of any culpability. See, e.g., Council for Periodical Distributors Ass’ns v. Evans, 827

F.2d 1483, 1487 (11th Cir. 1987); Jose P. v. Ambach, 669 F.2d 865, 871 (2nd Cir. 1982). The

court might well hold the Secretary, rather than the state agency, liable for attorney's fees

under the Equal Access to Justice Act, 28 U.S.C. § 2412(d). Even if fees were awarded

against the state agency, they would likely be reimbursed by the Secretary.” See 42 U.S.C.

§ 421(e); 20 C.F.R. $§ 404.1615(g), 416.1015(g). Given the wholly speculative nature of the

attorney's fees question, the possibility that some day, in some case, some court might grant

attorney’s fees against a state DDS office does not justify review of the state action issue by

this Court in this case.

The second difference between bringing a claim against the state agency unde?

section 405(g) and section 1983 is that section 405(g) contains a statutory, although waivable.

requirement of exhaustion of administrative remedies, while under section 1983, exhaustion

is not required. Patsy v. Bd. of Regents of State of Florida, 457 U.S. 496 (1982). In cases like

the instant case where the claim involves the practices and procedures used by the state

DDS office at the initial and reconsideration levels only, and is collateral to any claim tor

benefits, exhaustion is not required under section 405(g). See infra Part IV pp. 22-28. Thus,

whether the state DDS officials act under color of state law and are sued under section 1983,

or whether they are sued under section 405(g), exhaustion of administrative remedies would

not be required.

‘In Boring v. Sullivan, No 2:91-0429 (S.D.W.Va.), tor example, a class of Social Security

claimants challenged the failure of the state DDS oftice to assure that evaluations of residual

functional capacity are performed by a physician, as required by federal regulations. After

the district court denied the defendants’ motions to dismiss, the parties stipulated to a

settlement on the merits. Subsequently, the parties agreed to an amount of attorneys’ tees,

all of which were paid by the federal government.

12

The conclusion that state DDS officials act under color of state law under

section 1983 would not open the floodgates to thousands of lawsuits by unhappy Social

Security claimants. Where a claimant alleges only that the state agency's decision denying

benefits was inconsistent with federal law, and that the decision should be reversed, a section

1983 action would be foreclosed on the ground that the Social Security Act provides the

exciusive basis for review of the decision to deny benefits. See Smith v. Robinson, 468 US.

992 (1988).

The Secretary argues that allowing section 1983 actions against a state DDS

office could disrupt the administration of the disability programs in two ways. Sec. Pet. at

17-18. Both are contrived. First, she argues that exposing state officials to lawsuits could

discourage states from participating in the Social Security programs, irrespective of the

potential liability for attorney's fees. The Secretary ignores the fact. however, that the

Second Circuit in Ellis and the Third Circuit in Kuehner held, in the early 1980s, that Social

Security claimants could sue state DDS officials. A handful of other state DDS officials have

been sued in federal district court in the intervening years. See Sec. Pet. 17 n.10.

Nonetheless, we know of no state that has stopped administering the disability programs.

States have strong incentives to perform Social Security disability determina-

tions. Administering the Social Security disability system gives the states thousands of jobs

to fill, all of which go to their own residents. Furthermore, it is in the state’s financial

interest to see that all persons eligible for Social Security benefits receive them. Persons

found ineligible for Social Security disability benefits often receive assistance under state-

funded welfare programs. In Minnesota, the statute which authorizes the Department of

Jobs and Training to perform disability determinations provides: "It is the purpose of this

relationship [with the Social Security Administration] to permit the citizens of this state to

obtain all benefits available under federal law... ." Minn. Stat. § 268A.03(d).

The Secretary’s second argument is no more persuasive. She argues that the

Eighth Circuit’s decision would frustrate Congress’s goal of uniform administration of the

Act. Again, the Eighth Circuit’s decision has no impact on the question of uniformity.

There is no greater risk to uniformity when a court orders a DDS official to comply with the

Social Security Act and regulations than when a court orders the Secretary to comply. To

the contrary, litigation against DDS officials is likely to promote uniformity among the

different states and among the different decision-making levels.

ie The court of appeals here was reviewing the dismissal of respondents’

claims against the state petitioners for lack of jurisdiction. The facts in the record, viewed

in a light most favorable to the plaintiffs, clearly support the Eighth Circuit’s decision. See

infra Part II.A.4., pp. 15-16. The state action question is, however, a mixed question of law

and fact to be determined at trial. See, e.g., Albright v. Longview Police Dept., 884 F.2d 835,

838 and n. 1 (Sth Cir. 1989); International Society for Krishna Coasciousness v. Air Canada,

727 F.2d 253 (2d Cir. 1984) (interlocutory appeal dismissed as improvidently granted). The

parties should be permitted to complete discovery and present evidence on the issue.

The disagreement between the Second and Eighth Circuits on the “color ot

law" issue may not in fact be irreconcilable. Since both courts reached their conclusions on

appeal from a dismissal for lack of jurisdiction, neither court had the benefit of full

development of the relevant facts. When presented with the same fully developed factual

record, the two courts of appeals might agree that the state DDS officials do (or do not) act

under color of state law. Thus, even if this Court considers the question of whether the state

petitioner acts under color of state law or exclusively under color of federal law to be of

great importance, the Court should wait until after the final decision on the merits when the

record will be fully developed. See Brotherhood of Locomotive Firemen & Enginemen vy.

Bangor & Aroostock R.R., 389 U.S. 327, 328 (1967); Hamilton-Brown Shoe Co. v. Wolf Bros.,

240 U.S. 251, 258 (1916).

4. Finally, the petitions for a writ of certiorari should be denied because

the decision below on the state action issue was clearly correct. Section 1983 applies to

every person who acts “under color of any statute, ordinance, regulation, custom, or usage

42 U.S.C. § 1983. The suggestion that state agency officials do not act under color

of state law is counterintuitive. The State of Minnesota has, by statute, chosen to administer

the Social Security disability programs at the initial and reconsideration levels. Minn. Stat.

§ 268A.03(d). The Secretary would not permit a private entity to perform the functions

carried out by the DDS office; the alleged wrongful conduct by the state agency is possible

only because it is a state agency, clothed with the authority of the state. 42 U.S.C. § 421(a):

U.S. v. Classic, 313 U.S. 299, 326 (1941).

Petitioners’ argument here that the state officials do not act under color of

State law is analogous to arguing in NCAA v. Tarkanian, 488 U.S. 179 (1988), that the

University of Nevada did not act under color of state law when it sanctioned Tarkanian in

accordance with the NCAA’s "recommendations." Despite the acknowledged power and

influence of the NCAA, both the majority and the dissent agreed that the University officials

had acted under color of state law. 488 U.S. at 183, 199. The state petitioners, like the

University of Nevada, have agreed to comply with the regulations and guidelines of another

entity. Like the University, the state petitioners retain several options. They can simply

cease making disability determinations as to some or all categories of disability claims.

Alternatively, they can continue to administer the disability programs and work within the

federal quality assurance program to alter federal policies with which it disagrees. The state

petitioners, like the University, act under color of state law.

The state petitioners clearly carry the state’s "badge of authority.” Tarkanian,

488 U.S. at 191 (quoting Monroe v. Pape, 365 U.S. 167, 172 (1961)).. When DDS writes to

a claimant to set up a consultative exam, to request additional information, or to get

permission to obtain confidential information, it does so on official state agency stationery.

C.A. App. 374. When DDS refers a claimant to a consultant it sends the consultant a state

agency form advising the psychologist of the information needed. Jd. at 372-73. DDS

personnel are guided not only by the regulations and manual miaterial issued by the

Secretary, but also by a state agency manual, containing, for example. policies governing

when a claimant should be referred to a consultant. C.A. App. 366. Petitioners have cited

no decisions by this Court which support the startling proposition that state employees

working in a state agency can be considered anything other than state actors. The decisior

of the Eighth Circuit permitting respondents to proceed with their claim against the state

petitioners under section 1983 was correct.

B. The Court Should Not Issue a Writ of Certiorari to Decide Whether Congress

Clearly Intended to Prectude a Remedy Under Section 1983.

The state and federal petitioners also argue an alternative ground for rejecting

the court of appeals’ decision that respondents have stated a claim under 42 U.S.C. $1983.

Sec. Pet. at 18-19; State Pet. at 10-11. The petitioners argue that the Social Security Act

establishes a remedial scheme which demonstrates Congress’ intent to preclude a section

1983 remedy. On this issue, however, unlike the narrow question of whether the state

16

petitioner acts under color of state law, the petitioners cannot even allege a contlict among

the circuits. Further, the Secretary does not assert that the Eighth Circuit’s decision conflicts

with any decisions of this Court.’

As a threshhold matter, the petitioners did not adequately preserve the

question of whether Congress intended to foreclose a section 1983 action here. Both

petitioners made this argument for the first time in their petitions for rehearing in the Eighth

Circuit." The Secretary argued that the comprehensive remedial schemes established by

Congress foreclosed an action under section 1983. Secretary’s Petition for Rehearing at 8 -

10. She relied, however, on dictum in Suter v. Artist M.,_ U.S. _, 112 S.Ct. 1360 (1992) and

on Schweiker v. Chilicky, 487 U.S. 412 (1988), a case addressing whether a Bivens claim tor

damages could be brought under the Social Security Act: she failed even to cite Smith \.

Robinson, 468 U.S. 992 (1984), or Middlesex County Sewerage Authority v. National Sea

Clamanens Ass'n, 453 U.S. 1 (1981), the cases upon which the Secretary now relies. The state

Officials, raising the same argument, cited a footnote in Su/er, supra, and noted that the Suter

court had in turn cited Smith v. Robinson, supra and National Sea Clammers, supra. State's

Petition for Rehearing at 4.

* The state petitioner, but significantly, not the Secretary, argues that the decision of the

Court of Appeals "is inconsistent with this Court’s decision in Suter v. Artist M., _ U.S._, 112

S. Ct. 1360 (1992)." State Pet. at 10. In Suter, this Court found that Congress had not

established a federal right enforceable by section 1983. The state’s reliance on Suwier is

misplaced, since the Social Security Act clearly contains enforceable federal rights.

In his opening brief, the Secretary had discussed the comprehensive scheme created

by Congress to review individual disability decisions (42 U.S.C. § 405(g)), but only in

connection with her argurnent opposing mandamus jurisdiction under 28 U.S.C. § 1361. As

in the district court, the Secretary did not address the court’s jurisdiction over the claims

against the state agency at all.

17

Even if petitioners managed to preserve the argument by making it, however

inadequately, in their petitions for rehearing, the Eighth Circuit did not address this issue.

Furthermore, none of the other circuits has addressed the issue. This Court should not grant

review to address an issue that has not been decided by a single circuit. See Califano \

Yamaaski, 442 U.S. 682, 702 (1979) (preferable to allow several circuits to pass on a claim

to gain benefit of analysis of different courts).

Petitioners’ arguments are, in any event, plainly wrong. This Court has

repeatedly held that section 1983 should \be broadly construed. E.g., Golden State Transit

Corp. v. Los Angeles, 493 U.S. 103, 105 (1989). Consistent with this principle, the “burden

to demonstrate that Congress has expressly withdrawn the [1983] remedy is on the

defendant." Jd. at 107: see Wilder v. Virginia Hospitai Assoc., 496 U.S. 498, 520-21 (1990

This burden is very difficult to meet. This Court has repeatedly cautioned th

it will "not lightly conclude that Congress intended to preclude reliance on sectior 1983 as

a remedy for the deprivation of a federally secured right.” Wilder, 496 U.S. at 520; Golden

State Transit, 493 U.S. at 107; Wright v. Roanoke Redevelopment & Hous. Auth., 479 U.S. 418.

423-24 (1987); see also Smith v. Robinson, 468 U.S. 992, 1012 (1984). Absent an express

statutory provision precluding section 1983 enforcement, the Court has “tound private

enforcement foreclosed only when the statute itself creates a remediai scheme that 1s

‘sufficiently comprehensive . . . to demonstrate congressional intent to preclude the remedy

of suits under § 1983."" Wilder, 496 U.S. at 521 (quoting Middlesex County Sewerage Aun

v. National Sea Clammers Ass'n, 453 U.S. 1, 20 (1981)). Petitioners cannot meet thei

burden by showing that the statute includes a remedial mechanism different) trom

enforcement under § 1983; rather, "the statutory framework must be such that ‘[ajllowing

show that ( gress

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decisions, like those at issue here.'* Finally, to the best of our knowledge. the Secretary

has never exercised the statutory authority to take over the responsibilities of a DDS offi

Clearly, this does not approach the kinds of comprehensive remedial schemes found

evidence Congress's intent to foreclose a section 1983 action in Smith and Sea Clammers

Nor does a claimant's ability to appeal the denial of a claim for

evidence Congress's intent to foreclose a section 1983 action which seeks to challenge the

procedures used by a state DDS agency at the initial and reconsideration levels only. At th

ALJ level, an appeal under 42 U.S.C. § 405(g) determines one thing and one thin

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whether the claimant is eligible for benefits. The appeal trom the

ipy T( e State age V decis s

de novo, the state agency is not a party: the soie issve is eligibility for benefits \

administrative appeal under section 405(g) simply does not encompass a ¢ t .

DDS agency has systematically violated federal law or the Constituti

section 405(g) enables a claimant to bring an act against the Secretan

district court to challenge an unfavorable final decision made afte! ¢ y es

Its face authorize an action against the state agency. Even if the state agency were

defendant under section 405(g), which petitioners do not concede ( \ s

received a decision following a hearing would be unable to challenge the procedures us«

by the state agency only at the initial and reconsideration levels. If the claimant were de

benefits at the ALJ level, he could no longer claim that DDS policies are the \ {

cause of his injury. If the clainaant were awarded benefits at the ALJ leve ( eless

files a complaint under section 405(g), the government would surely seek dismissal tor lack

‘“Respondents attempted to find out what percentage of DDS denials and terminations

are reviewed by the Secretary, but the deposition witness did not know. Klemann

deposition, Vol. I] at 252. This question, like many others, awaits further discovery

%)

of standing. Cf. Sullivan v. Finkelstein, 496 U.S. 617, 625 (1990) (there would be "grave

doubt” whether the Secretar snl appeal adverse district court judgment after award of

benefits by ALJ on remand). In short, a remedial scheme which fails to provide any remedy

at all against the state actor cannot possibly be considered sufficiently comprehensive to

evidence Congress's intent to foreclose a section 1983 action. Cf. Wilder v. Virginia Hospital

Ass'n, 496 U.S. 498, 522-23 (1990)."*

III. The Petition Should Be Denied as to the Section 405(h) Question.

The state petitioners ask this Court to grant their petition for certiorari with

respect to whether they are protected from suit by 42 U.S.C. § 405(h)]. State Pet. ati, 13-

14.'* Section 405(h) precludes certain actions against "the United States, the Secretary, or

any officer or employee thereof.” The Eighth Circuit, relying on the plain language of the

statute, concluded that section 405(h) did not apply to the state DDS officials. Sec. Pet.

App. 16a-17a.

Petitioners do not claim that there is any split among the circuits as to this

question, or that the question is an important one. Their sole argument is that the Eighth

Circuit’s decision produces a result not intended by Congress. State Pet. at 13. There is

simply no basis for granting review as to this question.

The state petitioners concede that the Eighth Circuit's reading of section

40S(h) was “literally correct." Jd. The only way section 405(h) can be read to apply to

e<s

3 i : e . . “1

'*In contrast, the administrative scheme under 405(g) would indicate Congress’ intent to

foreclose a section 1983 action by a Social Security claimant seeking only reversal of the

denial of his claim for benefits. See supra p. 13.

The Secretary does not state this issue as a separate ‘Question, but does argue that

section 405(h) precludes a section 1983 claim against the state DDS officials. Sec. Pet. at

20.

actions against state agency officials is if they are considered to be "the Secretary’ as used

in the statute. If state DDS officials are considered to be "the Secretary” tor purposes ot

section 405(h), then surely they are also "the Secretary” tor purposes of section 405(g). which

creates a cause of action against the Secretary. To argue, as petitioners do, that section

405(h) precludes respondents’ claims against the state officials without admitting that section

405(g) would permit these claims makes no sense. For the reasons set forth in Part II.A.2..

supra pp. 11-14, whether respondents can proceed against the state petitioners under section

1983 or only under section 405(g) is of little importance to petitioners or respondents.

IV. The Petition Should be Denied as to Waiver of Exhaustion of Administrative

Remedies Under Section 405(g).

Even if this Court grants the state’s petition for a writ of certiorari, and grants

the Secretary’s petition for certiorari with respect to the first question presented, the Court

should deny review of the second question she presents, namely w hether the Court ot

Appeals properly relied on Bowen v. City of New York, 476 U.S. 467 (1986), to waive section

405(g)’s exhaustion requirement. See Sec. Pet. at |.

As an initial matter, the Secretary has not challenged the Eighth Circuits

conclusion that the district court had mandamus jurisdiction to consider respondents’ claims.

The existence of an alternative basis of jurisdiction renders the section 403(g) question

, 5

unimportant.”

'SThe Secretary misreads the Eighth Circuit's decision, asserting that the court of appeals

"found it unnecessary to decide whether relief was also available under the mandamus

statute. ..." Sec. Pet. at 13 n. 7. In fact, although the court found it unnecessary to discuss

mandamus jurisdiction, the court held that mandamus jurisdiction was available, vacated the

district court’s order dismissing mandamus jurisdiction, and specifically directed the district

court to consider the propriety of a mandamus order, relying on its decision in Mental Health

Ass’n v. Heckler, 720 F.2d 965, 971 n.17 (8th Cir. 1983). Sec. App. 15a.

7

Even if mandamus jurisdiction were not available, this Court should deny

review of the section 405(g) question. There has been no disagreement among the circuits

about the scope of Cin of New York.'® The courts of appeals have uniformly rejected the

Secretary's efforts to rewrite the-Cin of New York decision to limit class action challenges

to the administration of the Social Security disability programs.'” The Secretary is trying

to relitigate the issues fully settled by Cin of New York only seven years ago in an attempt

to insulate entire levels of agency decision-making from judicial review.

Furthermore, there has not been a proliferation of class actions against the

Secretary. In fiscal year 1991, there were nearly two million initial determinations on

disability claims. During the same time period, there were 4,869 federal district court

decisions on disability claims. 1992 Green Book at 61. A Westlaw search identified only ten

district court decisions in fiscal year 1991 in class actions filed under 42 U.S.C. § 405(g).""

Clearly, Social Security claimants themselves as well as the courts have followed the

Grant v. Shalala, No. 91-5675 (3d Cir. March 5, 1993), decided after the petitions’ for

certiorari were filed here, is not to the contrary. In Grant, a class of Social Security

claimants challenged the impartiality of one particular ALJ. The Third Circuit distinguished

City of New York and other cases which challenge a practice or policy of the Social Security

Administration. Slip. op. at 25, 28 n.15.

"In addition to the cases cited by the Solicitor General from the Third, Fourth, Seventh,

Ninth and District of Columbia Circuits, see Sec. Pet at 27 n. 19, the Second and Eighth

circuits have rejected his arguments. See New York v. Sullivan, 906 F.2d 910 (2d Cir. 1990):

Polaski v. Heckler, 751 F.2d 943 (8th Cir. 1984), remanded 476 U.S. 1167 (1986), on remand,

804 F.2d 456 (8th Cir. 1986), cert. denied, 482 U.S 927 (1987).

"Social Security claimants have prevailed on the merits of most if not all of the class

actions in which exhaustion has been waived. Were it not for waiver of exhaustion, the

Secretary would have been permitted to violate the mandates of the Social Security Act with

virtua] immunity, to the detriment of thousands of disabled children and adults. See, e.g.,

Sullivan v. Zebley, 493 U.S. 521 (1990).

23

admonition from this Court in City of New York that "exhaustion is the rule in the vast

majority of cases." See 476 U.S. at 486.

The Secretary’s efforts to distinguish this case from City of New York are

plainly erroneous. She argues that exhaustion should not have been waived in this case

because respondents have not established the existence of a clandestine policy. The

claimants in City of New York, after a seven-day trial, proved the existence of a clandestine

policy. This Court relied on the existence of a clandestine policy solely to toll the limitations

period for class members whose administrative claims had lapsed before the class action

complaint was filed. City of New York, 476 U.S. at 480-82. Respondents here moved tor

certification of a class whose members all had live claims at the time they tiled their

complaint. C.A. App. 126-27. Neither this Court nor any court of appeals has held that

clandestine policy is necessary or even relevant to the decision to waive exhaustion ot

administrative remedies for claimants with live claims.'” See 476 U.S. at 482-48o.

The City of New York decision relied heavily on Mathews v. Eldridge, 424 U-S.

319 (1976), in which this Court first discussed judicial waiver of exhaustion of administrative

remedies under section 405(g). In Eldridge, the plaintitt had challenged the tatlure of the

Secretary to provide pretermination hearings. Although there was nothing secretive about

the Secretary’s regulations governing the appeal process, this Court nevertheless concluded

that it was proper to waive the exhaustion requirement. The Civ of New York decision

adopted the Eldridge analysis, cautioning that the Eldridge tactors should not be apphed

mechanically. City of New York, 467 U.S. at 484. There is no support tor the Secretary's

'9See Marcus v. Sullivan, 926 F.2d 604, 614-15 (7th Cir. 1991); Bailey v. Sullivan, 88S F.2d

52, 65 (3d Cir. 1989); Hyatt v. Heckler, 807 F.2d 376, 379-80 (4th Cir. 1980), cert, denied, 484

U.S. 820 (1987).

24

argument that, in City of New York, this Court established an additional requirement,

allowing waiver of exhaustion only when claimants challenge a secretive policy.

The Secretary's attempt to distinguish this case from City of New York with

respect to the futility of exhaustion is also seriously flawed. Exhaustion would be futile here

for precisely the same reasons it was futile in City of New York. The policies which the

claimants challenged in City of New York, just like the policies challenged here, were applied

only at the initial and reconsideration level.’ See Cin of New York v. Heckler, 578 F. Supp.

1109, 1115-16 (E.D. N.Y. 1984). Here. as in City of New York, the “errors” which

respondents seek to correct are the practices and procedures employed by the state agency

Officials in the cases of all class members, regardless of the facts presented by any particular

claimant. An appeal by an individual claimant to an ALJ may result in the award of

benefits, but it never removes or corrects the systemic errors that respondents challenge.

The Secretary argues that exhaustion would not be futile here because a

claimant who pursues his administrative remedies will eventually be evaluated properly by

an ALJ, and may be awarded benefits. The question, however, is not whether a claimant

will eventually be evaluated properly and awarded benefits; the question is whether there

is any realistic possibility that the Secretary would alter an established policy at the behest

of a single claimant in an individual appeal. See Eldridge, 424 U.S. at 330. Under the

procedures challenged in Eldridge, Social Security claimants who exhausted their administra-

tive procedures eventually obtained adequate due process hearings. This Court approved

**Indeed, in its brief to this Court in City of New York, the Secretary emphasized that:

"The internal SSA memoranda reflecting the interpretation of the regulations that

respondents challenged concededly were not binding upon the ALJs or the Appeals

Council." C.A. Supp. App. at 13.

the waiver of exhaustion, however, where "denying Eldridge’s substantive claim ‘for other

reasons’ or upholding it ‘under other provisions’ at the post-termination stage . . . would not

answer his constitutional challenge." 424 U.S. at 331-32 (quoting Weinberger v. Salfi, 422 US.

749, 762 (1975)).

As in Eldridge and City of New York, denying or upholding respondents’ claims

for benefits at the ALJ stage does not answer their claim that the practices and procedures

employed at the initial and reconsideration levels are illegal. Most disability claimants lack

the personal resources to pursue an appeal to the hearing stage.*' Yet all claimants. as

Congress has mandated, are entitled to uniform standards throughout the administrative

. .. with two standards . . ., one for claimants who seek review . . .. and one for claimants

who do not." Jones v. Califano, 576 F.2d 12, 19 (2d Cir. 1978). As this Court stated in Cin

of New York: "We 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.” 476 US. at 484

The Secretary’s discussion of the irreparable harm requirement similarly finds

no support in any court decision. She suggests that only where going through the

administrative appeal process could cause a ‘severe medical setback. as in Cin of New York,

should exhaustion be waived. Sec. Pet. at 24-25. Althoug!. there were allegations that the

plaintiffs in City of New York would suffer severe medical setbacks if they were required to

exhaust their administrative remedies, this is not the only kind of irreparable harm that

71Only one third of the disability claimants whose applications are denied appeal to the

ALJ level. 1992 Green Book at 61.

260

justifies waiver. In Eldndge, 424 U.S. at 331, for example, this Court approved waiver of

exhaustion where the claimant “has raised at least a colorable claim that because of his

physical condition and dependency upon the disability benefits, an erroneous termination

would damage him in a way not recompensable through retroactive payments." And in

Schweiker v. Chiliky, 487 U.S. 412, 428 (1988), this Court recognized that "months of delay

in receiving [Social Security] income on which one has depended for the very necessities of

life cannot be fully remedied by the ‘belated restoration of back benefits.” The record in

this case is replete with uncontradicted evidence-ofthe ways in which the many months of

delay causes class-members to suffer not only economic loss, but also irreparable physical

and emotional] harm. (C.A. App. 128-248.)

Finally, with respect to the collateral nature of the relief sought, the Secretary

does not even pretend that the Eighth Circuit’s decision was inconsistent with City of New

York. Rather. she ignores the controlling decision and asserts that “the standard for

determining whether a claim is ‘collateral’ for purposes of dispensing with Section 405(g)’s

exhaustion requirement should . . . approximate the stringent standard developed for the

‘collateral order’ doctrine of appellate review enunciated in Cohen v. Beneficial Industrial

Loan Corp., 337 U.S. 541 (1949)." Sec. Pet. at 26.

No court has ever applied the collateral order doctrine of Cohen to the waiver

of exhaustion analysis. In fact, in City of New York, the lower court had recognized that the

plainuffs’ claims were not wholly collateral to their claims for benefits, but rather the two

were “somewhat intertwined”. City of New York v. Heckler, 742 F.2d 729, 736-37 (2d Cir.

1984). Nonetheless, this Court affirmed the lower court’s decision that the plaintiffs’ claims

were sufficiently collateral to support waiver of exhaustion. The Secretary is actually urging

this Court to substantially alter if not overrule its decision in City of New York. It the

Secretary’s arguments on collaterality were adopted, waiver of exhaustion of administrative

remedies would be foreclosed in virtually every case challenging the standards used to

determine disability claims.

There is absolutely no basis for this Court to issue a writ of certiorari to review

the section 405(g) question raised by the Secretary.

CONCLUSION

+

For the foregoing reasons, the petitions for a writ of certiorari should he

denied.

Dated this 14th day of July, 1993.

Respectfully submitted,

LAW OFFICES OF THE LEGAL AID

SOCIETY OF MINNEAPOLIS

i oe a

Laurie N. Davison

Counsel of -Record

M. Francesca Chervenak

Kathleen M. Davis

430 First Avenue Nort

Minneapolis, MN 55401-1780

(612) 332-1441

h. Suite 300

Barbara J. Kuhn

Legal Aid Society of Minneapolis

2929 Fourth Avenue South

Minneapolis, MNt 55408

(612) 827-3774

28

\ , e ‘te

Supe

i Ro SR Ba : roi.

OniGikAL

SUL 14 1993

: Nos. 92-1392 and 92-1395 DFFICE OF THE CLERK

——— — ae

IN THE SUPREME COURT OF THE UNITFD STATES

OCTOBER TERM, 1992

DONNA E. SHALALA, SECRETARY OF HEALTH AND

HUMAN SERVICES, PETITIONER,

Vv.

DANIEL J. SCHOOLCRAFT, ET AL., RESPONDENTS.

WALTER ROERS, in his official capacity as Director of

the Disability Determination Services; R. JANE

BROWN, in her official capacity as Commissioner of

the Minnesota Department of Jobs and Training, PETITIONERS,

v.

DANIEL J. SCHOOLCRAFT, ET AL., RESPONDENTS.

On Petitions For Writs Of Certiorari To The

United States Court Of Appeals For The Eighth Circuit

CERTIFICATE OF SERVICE

I, Laurie N. Davison, a member of the Bar of this Court, hereby certify that on this

14th day of July, 1993, one copy of a Motion for Leave to Proceed in forma pauperis,

Declarations of Daniel] J. Schoolcraft, Joseph L. Drumbeater and Kathleen M. Davis, and

Respondents’ Brief in Opposition in the above-entitled case were mailed, first class postage

prepaid, to:

Edwin S. Kneedler

Assistant to the Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 514-2217

Charles T, Mottl

Assistant Attorney General

1100 Bremer Tower

Seventh Place and Minnesota Street

St. Paul, MN 55101

(612) 296-3854

I further certify that all parties required to be served have been served.

Date: eee IY 1993 5 [: eee

seas) LAURIE N. DAVISON

Counsel of Record

Legal Aid Society of Minneapolis

430 First Avenue North, Suite 300

Minneapolis, Minnesota 55401-1780

(612) 332-1441

Counsel tor Respondents

PRESIDENT Law OFFICES EXECUTIVE DIRECTOR

L%anne M. Gre Jeremy Lance

E PRESIDENTS AGENCY ADMINISTRATOR

rebecca Palmer = of the Roge rC. Cob

Machae! Sulliva

TREASURER LEGAL AID SOCIETY OF MINNEAPOLIS

Felin ac la Pena

ADMINISTRATIVE OFFICI

440 FIRST AVENUE NORTH, SUITE 30k

MINNEAPOLIS, MN 55401-178&%

612 >.144]

July 14, 1993 RECEIVED

JUL 19 1993

William K. Suter OFFICE OF THE CLERK

Clerk of the Supreme Court SUPREME COURT, U.S.

United States Supreme Court

One First Street N.E.

Washington, D.C. 20543

Re: Shalala v. Schoolcraft; Roers v. Schoolcraft

Nos. 92-1392; 92-1395

Dear Mr. Suter:

Enclosed please find a Motion for Leave to Proceed In Forma Pauperis, Declaration of

Daniel J. Schoolcraft, Joseph L. Drumbeater and Kathleen M. Davis, the Original and twelve

copies of Respondents’ Brief in Opposition, and a Certificate of Service.

Very truly yours,

LEGAL AID SOCIETY OF MINNEAPOLIS

AS” ee? aint

Laurie N. Davison

Litigation Director

LND:bbo

Enclosures