DisabilityAuthority of Appeals Council to Dismiss a Request for Hearing for a Reason for Which the Administrative Law Judge Could Have Dismissed the RequestRes Judicata

SOCIAL SECURITY ADMINISTRATION

[Social Security Ruling SSR 95-2c]

Disability--Authority of Appeals Council to Dismiss a Request for

Hearing for a Reason for Which the Administrative Law Judge Could Have

Dismissed the Request--Res Judicata

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Ruling.

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SUMMARY: In accordance with 20 CFR 422.406(b)(1), the Commissioner of

Social Security gives notice of Social Security Ruling 95-2c. This

Ruling is based on the decision of the U.S. Court of Appeals for the

Sixth Circuit in Harper v. Secretary of Health and Human Services,

which upheld the authority of the Appeals Council to dismiss a request

for hearing for a reason the Administrative Law Judge (ALJ) could have

dismissed it, even though the ALJ held a hearing and issued a decision

on the merits.

This Ruling reconfirms the Appeals Council's authority to dismiss a

request for hearing on the basis of administrative res judicata.

EFFECTIVE DATE: June 16, 1995.

FOR FURTHER INFORMATION CONTACT: Joanne K. Castello, Division of

Regulations and Rulings, Social Security Administration, 6401 Security

Boulevard, Baltimore, MD 21235, (410) 965-1711.

SUPPLEMENTARY INFORMATION: Although we are not required to do so

pursuant to 5 U.S.C. 552 (a)(1) and (a)(2), we are publishing this

Social Security Ruling in accordance with 20 CFR 422.406(b)(1).

Social Security Rulings make available to the public precedential

decisions relating to the Federal old-age, survivors, disability,

supplemental security income, and black lung benefits programs. Social

Security Rulings may be based on case decisions made at all

administrative levels of adjudication, Federal court decisions,

Commissioner's decisions, opinions of the Office of the General

Counsel, and other policy interpretations of the law and regulations.

Although Social Security Rulings do not have the force and effect

of the law or regulations, they are binding on all components of the

Social Security Administration, in accordance with 20 CFR

422.406(b)(1), and are to be relied upon as precedents in adjudicating

other cases.

If this Social Security Ruling is later superseded, modified, or

rescinded, we will publish a notice in the Federal Register to that

effect.

(Catalog of Federal Domestic Assistance, Program Nos. 96.001, Social

Security--Disability Insurance; 96.002, Social Security-- Retirement

Insurance; 96.004, Social Security--Survivors Insurance; 96.005,

Special Benefits for Disabled Coal Miners; 96.006, Supplemental

Security Income.)

Dated: June 6, 1995.

Shirley S. Chater,

Commissioner of Social Security.

Sections 205(b) and 221(d) of the Social Security Act (42 U.S.C.

405(b) and 421(d)) Disability--Authority of Appeals Council to dismiss

a request for hearing for a reason for which the administrative law

judge could have dismissed the request--res judicata.

20 CFR 404.957(c)(1)

Harper v. Secretary of Health and Human Services, 978 F.2d 260 (6th

Cir. 1992)

The claimant, who stopped working in January 1981, filed

applications for

[[Page 31754]]

disability insurance benefits in 1981, 1982, and 1986. The Social

Security Administration (SSA) denied all of these applications. In May

1987, she filed a fourth application. SSA denied this application

initially and upon reconsideration, and the claimant did not request

further administrative review. In June 1988, the claimant filed a fifth

application which was denied initially and upon reconsideration. The

claimant requested and received a hearing before an Administrative Law

Judge (ALJ). The ALJ issued a decision denying her application, finding

that she was not disabled through December 31, 1986, the date on which

her insured status expired. The claimant filed a request for Appeals

Council review. The Appeals Council granted the request, vacated the

ALJ's decision, and dismissed the request for hearing on the basis of

administrative res judicata.

The Appeals Council concluded that under the doctrine of

administrative res judicata, 20 CFR 404.957(c)(1), the determination

denying the claimant's fourth application was dispositive of her

subsequent claim.

The claimant then filed a civil action. The district court remanded

the case to the Secretary to determine whether the determination on the

claimant's fourth application should have been reopened pursuant to 20

CFR 404.988(a). The Appeals Council found no basis for reopening that

determination, and again determined that the request for hearing on the

fifth application should be dismissed on the basis of res judicata. The

case was returned to the district court which upheld the action of the

Appeals Council. The claimant then appealed to the United States Court

of Appeals for the Sixth Circuit. In her appeal, the claimant

maintained that the ALJ's decision to hold a hearing and issue a

decision on the merits was not subject to review by the Appeals

Council. She further argued that even if the ALJ erred in holding the

hearing, the Appeals Council could not dismiss the request for hearing

on the basis of res judicata after the ALJ heard the case on the

merits.

The Court of Appeals stated that the ALJ's action in holding a

hearing and issuing a decision appeared to be erroneous and that it

knew of no reason why it was not within the province of the Appeals

Council to correct the error. The court held that the Appeals

Council has authority to vacate an ALJ's decision and dismiss the

request for hearing on res judicata grounds even though the ALJ held

a hearing and issued a decision on the merits.

Per Curium

This is a social security case in which the appellant filed a

series of claims asserting that she had become disabled before her

insured status expired. The main question before us is whether, after

an administrative law judge has conducted an evidentiary hearing

despite the existence of an earlier final decision denying the same

claim, the Appeals Council can deny the hearing request retroactively,

thereby foreclosing judicial review. The district court answered this

question in the affirmative and dismissed the claimant's case. We agree

with the district court's decision, and we shall affirm the dismissal.

I

The claimant, Edith Harper, held a job for a ten-year period ending

in January of 1981. She has not worked since that time, and her insured

status expired on December 31, 1986.

Ms. Harper filed applications for disability insurance benefits on

April 7, 1981, February 8, 1982, April 22, 1986, May 19, 1987, and June

23, 1988. The first, third, and fourth applications were denied

initially and upon reconsideration. The second was denied initially,

and no appeal was taken from its denial. Ms. Harper did not request a

hearing before an administrative law judge with respect to any of the

first four applications.

After the denial upon reconsideration of her fifth claim, Ms.

Harper sought and was granted a hearing before an administrative law

judge. The ALJ denied the fifth claim on its merits, finding that Ms.

Harper had not been disabled as of the last date on which she was

insured. Ms. Harper sought review by the Appeals Council, which granted

review in a letter dated March 12, 1990. In the same letter, the

council alerted Ms. Harper to the possibility that her claim would be

disposed of on administrative res judicata grounds.

On May 25, 1990, the Appeals Council vacated the decision of the

ALJ and retroactively denied the request pursuant to which the ALJ had

conducted the hearing. The council took the position that under the

doctrine of administrative res judicata, the denial of Ms. Harper's

fourth claim was dispositive of any subsequent claim.

Following initiation of the present suit for judicial review, the

district court remanded the matter to the Appeals Council for a

determination as to whether Ms. Harper's fourth application for

benefits should have been reopened under 20 C.F.R. Sec. 404.988(a). The

council declined to reopen the fourth claim, finding that Ms. Harper

had presented no new evidence as to her condition before December 31,

1986. The council again determined that the fifth claim was barred by

the doctrine of res judicata. In a well reasoned opinion filed by the

district court (Graham, J.) on November 18, 1991, the court then

dismissed Ms. Harper's lawsuit. This appeal followed.

The first question we must address is whether the federal courts

have jurisdiction. The pertinent statute, 42 U.S.C. Sec. 405(g),

provides, in relevant part, as follows:

``Any individual, after any final decision of the Secretary made

after a hearing to which he was a party, irrespective of the amount

in controversy, may obtain a review of such a decision by a civil

action commenced within sixty days. * * *'' (Emphasis supplied.)

The Appeals Council determined that the final decision of the

Secretary was the denial upon reconsideration of the fourth claim in

1987. The final decision of the Secretary thus appears to have been

made before any evidentiary hearing took place, which would normally

preclude judicial review. A refusal to reopen a prior application is

not a final decision and may not be reviewed by the courts. Califano v.

Sanders, 430 U.S. 99, 107-09, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977);

Blacha v. Secretary of Health and Human Services, 927 F.2d 228 (6th

Cir.1990).

Ms. Harper claimed before the district court, and she claims here,

that she was deprived of property without due process of law in

violation of her rights under the Fifth Amendment of the United States

Constitution. As Califano noted, where a constitutional claim is made

in conjunction with a social security benefits case, jurisdiction may

attach outside the scope of 42 U.S.C. 405(g) and despite the

foreclosure, in 42 U.S.C. 405(h), of general federal question

jurisdiction over social security appeals. (The latter section provides

that ``[n]o action against the United States, the Secretary, or any

officer or employee thereof shall be brought under section 1331 or 1346

of Title 28 to recover on any claim arising under this subchapter.'')

The district court thus had jurisdiction to entertain Ms. Harper's

constitutional claim, regardless of whether jurisdiction existed under

42 U.S.C. 405(g).

II

Ms. Harper contends, as we have said, that the action of the

Appeals Council in vacating the ALJ's decision to grant a hearing on

the merits and disposing of the case on res judicata grounds

constituted a denial of due process. As a preliminary matter we note a

potential stumbling block not addressed in the parties' briefs.

Under the language of the Fifth Amendment, due process protections

[[Page 31755]]

attach only to ``life, liberty, or property.'' Ms. Harper could not

prevail on her constitutional claim, therefore, without showing that

she was deprived of ``property'' without due process of law. The

existence of a property interest here is far from self-evident.

``The definition of property since the 1972 [Supreme Court]

decision in Board of Regents v. Roth has centered on the concept of

`entitlement.' The Court will recognize interests in government

benefits as constitutional `property' if the person can be deemed to

be `entitled' to them. Thus, the applicable federal, state or local

law which governs the dispensation of the benefit must define the

interest in such a way that the individual should continue to

receive it under the terms of the law. This concept also seems to

include a requirement that the person already has received the

benefit or at least had a previously recognized claim of

entitlement.'' 2 Rotunda & Nowak, Treatise on Constitutional Law

Sec. 17.5(a) at 628 (1992).

The right to due process applies to the termination of government

benefits already being received, Goldberg v. Kelly, 397 U.S. 254, 90

S.Ct. 1011, 25 L.Ed.2d 287 (1970), but Ms. Harper has never received

disability benefits. Two of our sister courts of appeals have extended

Goldberg to applicants for government benefits that have not yet been

awarded. See Daniels v. Woodbury County, Iowa, 742 F.2d 1128 (8th

Cir.1984) (finding applicants for general assistance on the county

level had a right to due process), and Griffeth v. Detrich, 603 F.2d

118 (9th Cir.1979), cert. denied sub nom. Peer v. Griffeth, 445 U.S.

970, 100 S.Ct. 1348, 64 L.Ed.2d 247 (1980) (finding applicants for

benefits under state general assistance program had a ``legitimate

expectation of entitlement'' because of mandatory language in state

statute).

The Supreme Court has recognized a right to due process on the part

of parole applicants who can point to a statute saying that prisoners

``shall'' be released under certain conditions, Greenholtz v. Nebraska

Penal Inmates, 442 U.S. 1, 99 S.Ct. 2100, 60 L.Ed.2d 668 (1979), but

the Court has not determined whether applicants for monetary benefits

have a similar right. See Lyng v. Payne, 476 U.S. 926, 942, 106 S.Ct.

2333, 2343, 90 L.Ed.2d 921 (1986) (``We have never held that applicants

for benefits, as distinct from those already receiving them, have a

legitimate claim of entitlement protected by the Due Process Clause of

the Fifth or Fourteenth Amendment''). See also Peer v. Griffeth, 445

U.S. 970, 100 S.Ct. 1348, 64 L.Ed.2d 247 (1980) (Rehnquist, J.,

dissenting from denial of certiorari) (``Particularly when the only

[California] appellate court to consider the question has concluded

that there is no protected property interest under state law, this

extension of Goldberg v. Kelly * * * should receive plenary

consideration by this Court''). The Rotunda and Nowak treatise comments

that ``[a]lthough the Court has not resolved this issue, under the

`entitlement' principle it would appear that a person has no property

interest in a benefit unless he has previously been granted it by the

government.'' 2 Rotunda & Nowak, supra Sec. 17.5, at 629.

This court was presented with an opportunity to adopt Griffeth's

``mandatory language'' rationale in Baker v. Cincinnati Metropolitan

Housing Authority, 675 F.2d 836 (6th Cir.1982). There the plaintiffs

sought changes in procedures followed by a housing authority in

determining eligibility for a new Housing and Urban Development

program. The district court relied partially on Griffeth in determining

that persons who could show they met the criteria for the program were

entitled to due process protection. Baker v. Cincinnati Metropolitan

Housing Authority, 490 F.Supp. 520, 532 (S.D. Ohio 1980). We decided on

appeal that the procedures satisfied due process, but we did not

specifically address the question whether due process was

constitutionally required.

In the case at bar we find it unnecessary to decide whether Ms.

Harper had a ``property'' interest of which she could not be deprived

without due process. Whether or not there was a property interest, Ms.

Harper received all the process that would have been due under any

hypothesis.

The regulations promulgated by the Secretary make it clear that an

unappealed denial upon reconsideration is a final decision. 20 C.F.R.

Sec. 404.921 provides as follows:

``The reconsidered determination is binding unless--

(a) You or any other party to the reconsideration requests a

hearing before an administrative law judge within the stated time

period and a decision is made;

(b) The expedited appeals process is used; or

(c) The reconsidered determination is revised.''

Because the denial of Ms. Harper's fourth claim upon

reconsideration was not appealed or revised, and because the denial was

not followed by a timely request for a hearing before an ALJ, the

denial was a final decision of the Secretary that was, according to the

regulation, ``binding.'' The ALJ who heard Ms. Harper's fifth claim was

aware of this problem, yet he offered no explanation of his failure to

give the reconsidered denial of the fourth claim the binding effect

prescribed by the regulation. The ALJ's decision to treat the earlier

determination as non-binding appears to have been erroneous, and we

know of no reason why it was not within the province of the Appeals

Council to correct the error.

In Mullen v. Bowen, 800 F.2d 535 (6th Cir.1986) (en banc), this

court noted that the Appeals Council may review any determination by an

ALJ that it chooses to review, whether or not there has been an

application for such review.1 See id. at 545, 554 (Nelson, J.,

concurring). The Appeals Council is empowered to consider all aspects

of a decision, even if the claimant seeks review of a portion only--and

the council need not give notice to the claimant of its intent to

review the entire decision. Gronda v. Secretary of Health & Human

Services, 856 F.2d 36, 38-39 (6th Cir.1988), cert. denied, 489 U.S.

1052, 109 S.Ct. 1312, 103 L.Ed.2d 581 (1989).2

\1\ Since Mullen was decided, the Seventh Circuit, sitting en

banc, has reversed an earlier panel decision and come down on

Mullen's side. See Bauzo v. Bowen, 803 F.2d 917, 921 (7th Cir.1986)

(en banc), overruling Scott v. Heckler, 768 F.2d 172 (7th Cir.1985).

Seven circuits now adhere to Mullen's view; only the Third Circuit

remains on the other side. See Mullen, 800 F.2d at 539 n. 4 (citing

cases, including Powell v. Heckler, 783 F.2d 396 (3rd Cir.1986)).

\2\ Gronda forecloses any argument that the council should not

have been able to bar Ms. Harper's claim on res judicata grounds

because she had no notice that res judicata might be used against

her. The point is moot, however, in light of the council's letter of

March 12, 1990, warning Ms. Harper of its intention to dismiss her

claim on the basis of res judicata and inviting her arguments

against such action.

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Notwithstanding Mullen, Ms. Harper maintains that the ALJ's

decision to grant a hearing was not subject to review by the Appeals

Council. Even if the grant of a hearing was improvident, she suggests,

the council could not set the grant aside and invoke the doctrine of

res judicata after the ALJ had heard the claim on the merits. In cases

that are almost exactly parallel to this one, however, the Courts of

Appeals for the Fifth and Seventh Circuits have held that the council

can reopen a decision by an ALJ to grant a hearing, and--even if a

hearing has actually been held--can dismiss on res judicata grounds.

Ellis v. Schweiker, 662 F.2d 419 (5th Cir.1981); Johnson v. Sullivan,

936 F.2d 974 (7th Cir.1991). See also Taylor v. Heckler, 765 F.2d 872,

874-77 (9th Cir.1985) (upon second application, ALJ reopened first

application and found claimant disabled; Appeals Council vacated ALJ's

decision and dismissed on res judicata grounds). We agree with these

decisions, and we adopt their reasoning.

[[Page 31756]]

Poulin v. Bowen, 817 F.2d 865 (D.C. Cir.1987), relied on by Ms.

Harper, is not in point. In Poulin the ALJ reopened a prior claim and

considered it on the merits. The Appeals Council also considered the

claim on the merits. The court of appeals simply held that where the

Secretary does not rely on the res judicata defense in agency

proceedings, he cannot raise it initially upon judicial review.

Ms. Harper also contends that one of the forms she received from

the agency was misleading about her right to future appeals of the

denial of benefits. The brief she filed in this court refers to a

letter she addressed to the Appeals Council on this issue, but the

letter is not a part of the administrative record. Because the record

does not indicate that the issue was raised at the administrative

level, we are not in a position to consider the issue. See Hix v.

Director, Office of Workers' Comp. Programs, 824 F.2d 526 (6th

Cir.1987).

For the reasons stated, we find no error in the decision of the

district court. The order in which that court dismissed Ms. Harper's

lawsuit is therefore AFFIRMED.

[FR Doc. 95-14775 Filed 6-15-95; 8:45 am]

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