# Opposition Brief — Shalala v. Schoolcraft > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_2149%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1993 - **Citation:** 510 U.S. 805 ## Text 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 ee Res i Da a ge ee eee ee ee ee Ae ete 10 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 ae a sc IE ca otha she ek arp Te TAL A ROE che RO eR ie 3 i 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 RR 7 ee 2 ee eran er yos Tawra eran ee ee ee a passim 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 oe Sok eo Fe Se, See. TF, PO. 1, LA TIO ocean vce sc isws dene eeaas 6 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 c } HUA eh il tt le award OT dene WiHaNnts e TOCE he appe: } ; »+, il 7 ii Alithough + -?*} . + + , » v2 | ; iTv ~ CL ie di) ] | ‘ hal ive remedies will often res eat Wilt validity ot 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 » é . , " 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 First. thev | t t Secre pences ne T v I A -_ I ih .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 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_2149%3A3. Public record. Not legal advice.