Federal Old-Age, Survivors, and Disability Insurance Benefits; Supplemental Security Income for the Aged, Blind, and Disabled; Organization and Procedures; Application of Circuit Court Law

Federal RegisterSep 18, 1997

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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416

RIN 0960-AE74

Federal Old-Age, Survivors, and Disability Insurance Benefits;

Supplemental Security Income for the Aged, Blind, and Disabled;

Organization and Procedures; Application of Circuit Court Law

AGENCY: Social Security Administration (SSA).

ACTION: Proposed rules.

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SUMMARY: These proposed regulations would revise the current

regulations governing how we apply holdings of the United States Courts

of Appeals that we determine conflict with our interpretation of the

Social Security Act or regulations in adjudicating claims under title

II and title XVI of the Social Security Act (the Act). The regulations

explain the new goal we have adopted to ensure that Acquiescence

Rulings (ARs) are developed and issued promptly and the new procedures

we are implementing to identify cases pending in the administrative

process which might be affected by ARs.

DATES: To be sure your comments are considered, we must have them no

later than November 17, 1997.

ADDRESSES: Comments should be submitted in writing to the Commissioner

of Social Security, P.O. Box 1585, Baltimore, Maryland 21235, sent by

telefax to (410) 966-2830, sent by E-mail to ``[email protected],''

or delivered to the Division of Regulations and Rulings, Social

Security Administration, 3-B-1 Operations Building, 6401 Security

Boulevard, Baltimore, MD 21235, between 8:00 a.m. and 4:30 p.m. on

regular business days. Comments may be inspected during these same

hours by making arrangements with the contact person shown below.

FOR FURTHER INFORMATION CONTACT: Harry J. Short, Legal Assistant,

Division of Regulations and Rulings, Social Security Administration,

6401 Security Boulevard, Baltimore MD 21235, (410) 965-6243 for

information about these rules. For information on eligibility or

claiming benefits, call our national toll free number, 1-800-772-1213.

SUPPLEMENTARY INFORMATION: On January 11, 1990, (55 FR 1012) we

published final regulations to implement a revised policy for applying

circuit court holdings that conflict with our interpretation of the Act

or regulations to subsequent claims within that circuit involving the

same issue.

[[Page 48964]]

Under those regulations, which are set out at 20 CFR 404.985 and

416.1485, we prepare Acquiescence Rulings which explain the circuit

court holdings and provide binding guidance to adjudicators on how to

apply the holding to subsequent claims within the circuit involving the

same issue. Those regulations reflected the agency's decision in 1985

to abandon its prior policy of applying conflicting circuit court

holdings only to the named party or parties to the decision, rather

than to other cases pending before an Administrative Law Judge or the

Appeals Council involving the same issue or issues. The 1990

regulations expanded the 1985 policy decision to apply an AR to all

levels of adjudication, as appropriate.

After the 1990 regulations were adopted, allegations that the

agency refused to acquiesce in circuit court decisions with holdings in

conflict with our interpretation of the Act or regulations declined

dramatically. A major goal of the 1990 regulations has been achieved

because the circuit courts have found virtually no cause to cite the

agency for failing to adhere to circuit court precedent.

On July 2, 1996, we issued Social Security Ruling 96-1p (61 FR

34470) reaffirming the rules established in the 1990 regulations. Since

that time, we have reviewed our rules and our implementing procedures

to determine what changes could be instituted to further improve the

acquiescence process. Our review has led us to conclude that we should

reaffirm an important principle regarding the impact of litigation on

claims adjudication and, through these final regulations, amend the

1990 regulations in two significant respects.

The Role of Litigation in the Policymaking Process

Our review indicated that it is important to reaffirm the principle

that our goal in administering our programs is to have uniform,

national program standards. Our procedures, which provide for

acquiescence within the circuit when a circuit court issues a decision

containing a holding which conflicts with our interpretation of the Act

or regulations, result in differing policies in different sections of

the country. This situation is not desirable and ordinarily should not,

if possible, continue indefinitely.

Therefore, we wish to make it clear that generally ARs are

temporary measures. When we receive a circuit court decision containing

a holding which conflicts with our interpretation of the Act or

regulations, we consider whether the rule at issue should be changed on

a nationwide basis to conform to the court's holding. If we continue to

believe that our interpretation of the statute or regulations at issue

is correct and we seek further judicial review of the circuit court's

decision, we will stay further development of the AR until the judicial

review process runs its course. If our assessment shows that we should

change our rules and adopt a circuit court's holding nationwide, we

will, at the time we publish the AR, have determined the steps

necessary to do so. This may require changing our regulations or

rulings; it may also require seeking a clarifying legislative change to

the Act. In this case, however, we would proceed to issue an AR since

adopting the rules nationwide inevitably requires a significant period

of time.

Similarly, if our assessment is that our rules are correct but we

are unable to resolve the matter by seeking further judicial review, we

will issue an AR and at the time we publish the AR have determined the

appropriate steps to attempt to address the issue which was the subject

of the circuit court's holding. This may mean issuing clarifying

regulations or seeking legislation. There are certain instances when an

issue cannot be resolved, such as a constitutional issue which the

Supreme Court chooses not to review and, therefore, an AR may remain in

effect.

Although our goal to have uniform national standards is implicit in

the current regulations, we are including in this preamble, an explicit

statement of our commitment to maintaining a uniform nationwide system

of rules and regulations. In addition to making minor editorial

corrections to the current regulations, these proposed rules would

amend the regulations in two substantive areas, as follow:

Establishing a Timeliness Goal for Issuing Acquiescence Rulings

A common criticism regarding the current process involves the

length of time it takes for SSA to prepare and issue an AR. As a

result, we have reassessed our procedures and have decided that we will

release an AR for publication in the Federal Register no later than 120

days from the time we receive a precedential circuit court decision for

which the AR is being issued, unless further judicial review of that

decision is pending. We propose to add new sections 404.985(b)(1) and

416.1485(b)(1) so that the public is fully informed of this timeframe.

Identifying Pending Claims Which May Be Affected by an AR

When we published the 1990 regulations, we noted that a number of

commenters on the 1988 proposed regulations (53 FR 46628 (November 18,

1988)) urged that we take action to identify and list pending claims

that might be affected by an AR. In the response to that comment, we

stated:

As a matter of operational necessity, some time will always

elapse between the date of a court decision and the time that we

could notify all adjudicators to begin listing cases which might be

affected by its holding. Thus, a substantial number of cases would

not be listed for later readjudication. The process which these

comments suggest presumes instantaneous, comprehensive

identification of all cases, which operationally we cannot

accomplish. Therefore, despite the fact that requiring claimants to

seek readjudication does require some action on their part, we have

concluded that this is the most efficient and effective way to

proceed and have not adopted these comments in the final

regulations.

(55 FR 1012, 1013). The basic facts noted in our response remain valid.

Despite improved technology, it is still operationally impossible for

us to identify all pending claims that might be affected by an AR.

However, we have reassessed this situation and have now decided that it

would be a significant benefit to claimants if we were to act as

expeditiously as possible to identify pending claims that might be

affected by an AR, even though we will not be able to identify all such

claims.

Therefore, as described in the proposed new sections 404.985(b)(3)

and 416.1485(b)(3), we are implementing the following procedures. As

soon as possible after we receive a circuit court decision that we find

may contain a holding that conflicts with our interpretation of the Act

or regulations, we will develop and provide our adjudicators with

criteria that they will use to identify pending claims we are deciding

within the relevant circuit that might be affected, if we subsequently

determine that an AR is required. If an AR is subsequently released, a

notice will be sent informing the claimant in these cases that might be

affected by the AR that an AR has been issued that might affect the

claim. The notice to the claimant will also explain the procedures for

obtaining a readjudication of the claim under the AR. If we develop

criteria and begin identifying cases but subsequently determine that an

AR is not required, the notices will not be sent.

We will notify adjudicators of the appropriate criteria to be used

to identify cases no later than 10 days after

[[Page 48965]]

we receive a circuit court decision that we determine may contain a

holding which conflicts with our interpretation of the Act or

regulations. Although we believe that the new procedure to identify

pending claims within the relevant circuit that might be affected will

greatly reduce the number of claimants who would have to learn of the

issuance of the AR through the Federal Register publication of it or

otherwise, the new procedure will not capture everyone. For this

reason, we have retained the readjudication procedure in sections

404.985(b)(2) and 416.1485(b)(2) to ensure the protection of all

claimants. Additionally, if a claimant or an adjudicator brings to our

attention that a claim could potentially be affected by a circuit court

decision that might become the subject of an AR, we will consider

identifying that case pending a decision as to whether an AR is

necessary in the circuit court decision in question.

Electronic Version

The electronic version of this document is available on the Federal

Bulletin Board (FBB) at 9:00 a.m. on the date of publication in the

Federal Register. To download the file, modem dial (202) 512-1387. The

FBB instructions will explain how to download the file and the fee.

This file is in WordPerfect and will remain on the FBB during the

comment period.

Regulatory Procedures

Executive Order 12866

We have consulted with the Office of Management and Budget (OMB)

and determined that these rules do not meet the criteria for a

significant regulatory action under Executive Order 12866. Thus, they

are not subject to OMB review.

Regulatory Flexibility Act

We certify that these regulations will not have a significant

economic impact on a substantial number of small entities because these

rules affect only individuals. Therefore, a regulatory flexibility

analysis as provided in the Regulatory Flexibility Act, as amended, is

not required.

Paperwork Reduction Act

These proposed rules contain reporting requirements in Part 404,

section 404.985(b)(2) and 416.1485(b)(2). As required by 42 U.S.C.

section 3507, as amended by section 2 of the Paperwork Reduction Act of

1995, we will submit a copy to the Office of Management and Budget for

its review.

The regulation sections cited above allow claimants to request

application of the published Acquiescence Ruling to a prior

determination or decision. Claimants must demonstrate that the

application of the Acquiescence Ruling could change the prior

determination or decision. Claimants may do so by submitting a

statement. If the claimant can so demonstrate, the information will be

used to readjudicate the claim. Thus, claimants, whose determinations

or decisions on their claims may be affected by the Acquiescence

Ruling, may continue to make submissions to the Agency regarding such

claims.

We estimate that the public reporting burden will be 17 minutes per

response for between 0 and 50,000 respondents depending on the

characteristics of the individual AR, resulting in up to 7083.33 burden

hours per AR. We estimate there will be 3 to 4 ARs per year. If you

have any comments or suggestions on this estimate, write to OMB and SSA

at the following addresses:

Office of Management and Budget, OIRA, Attn: Laura Oliven, Room 10230,

New Executive Office Building, Washington, D.C. 20503.

Social Security Administration, DCFAM. Attn: Nicholas E. Tagliareni, 1-

A-21 Operations Building, 6401 Security Blvd., Baltimore, MD 21235.

In addition to your comments on the accuracy of the Agency's burden

estimate, we are soliciting comments on the need for the information;

its practical utility; ways to enhance its quality, utility and

clarity; and on ways to minimize the time it takes for claimants to

request application of the Acquiescence Ruling to the prior

determination, including the use of automated collection techniques or

other forms of information technology.

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

Security-Disability Insurance; 96.002, Social Security-Retirement

Insurance; 96.003, Social Security-Special Benefits for Persons Aged

72 and Over; 96.004, Social Security-Survivors Insurance; 96.005,

Special Benefits for Disabled Coal Miners; 96.006, Supplemental

Security Income)

List of Subjects

20 CFR Part 404

Administrative practice and procedure, Death benefits, Disability

benefits, Old-Age, Survivors and Disability Insurance, Reporting and

recordkeeping requirements, Social Security.

20 CFR Part 416

Administrative practice and procedure, Aged, Blind, Disability

benefits, Public assistance programs, Supplemental Security Income

(SSI), Reporting and recordkeeping requirements.

Dated: September 11, 1997.

John J. Callahan,

Acting Commissioner of Social Security.

For the reasons set out in the preamble, subpart J of part 404 and

subpart N of part 416 of chapter III of title 20 of the Code of Federal

Regulations are proposed to be amended as set forth below.

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE

(1950- )

1. The authority citation for subpart J of part 404 continues to

read as follows:

Authority: Secs. 201(j), 205 (a), (b), (d)-(h), and (j), 221,

225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 405

(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C.

3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note);

secs. 5, 6 (c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C.

421 note).

2. Section 404.985 is revised to read as follows:

Sec. 404.985 Application of circuit court law.

The procedures which follow apply to administrative determinations

or decisions on claims involving the application of circuit court law.

(a) General. We will apply a holding in a United States Court of

Appeals decision that we determine conflicts with our interpretation of

a provision of the Social Security Act or regulations unless the

Government seeks further judicial review of that decision or we

relitigate the issue presented in the decision in accordance with

paragraphs (c) and (d) of this section. We will apply the holding to

claims at all levels of administrative adjudication within the

applicable circuit unless the holding, by its nature, applies only at

certain levels of adjudication.

(b) Issuance of an Acquiescence Ruling. When we determine that a

United States Court of Appeals holding conflicts with our

interpretation of a provision of the Social Security Act or regulations

and the Government does not seek further judicial review or is

unsuccessful on further review, we will issue a Social Security

Acquiescence Ruling. The Acquiescence Ruling will describe the

administrative case and the court decision, identify the issue(s)

involved, and explain how we will apply the holding, including, as

necessary, how the holding relates to other decisions within the

applicable circuit. These Acquiescence Rulings will generally be

effective on the date of their publication in the Federal Register

[[Page 48966]]

and will apply to all determinations and decisions made on or after

that date unless an Acquiescence Ruling is rescinded as stated in

paragraph (e) of this section. The process we will use when issuing an

Acquiescence Ruling follows:

(1) We will release an Acquiescence Ruling for publication in the

Federal Register for any precedential circuit court decision that we

determine contains a holding that conflicts with SSA's interpretation

of a provision of the Social Security Act or regulations no later than

120 days from the receipt of the court's decision. This timeframe will

not apply when we decide to seek further judicial review of the circuit

court decision or when coordination with the Department of Justice and/

or other Federal agencies makes this timeframe no longer feasible.

(2) If we make a determination or decision on your claim between

the date of a circuit court decision and the date we publish an

Acquiescence Ruling, you may request application of the published

Acquiescence Ruling to the prior determination or decision. You must

demonstrate that application of the Acquiescence Ruling could change

the prior determination or decision in your case. You may demonstrate

this by submitting a statement that cites the Acquiescence Ruling and

indicates what finding or statement in the prior determination or

decision conflicts with the Acquiescence Ruling. If you can so

demonstrate, we will readjudicate the claim at the level at which it

was last adjudicated in accordance with the Acquiescence Ruling. Any

readjudication will be limited to consideration of the issue(s) covered

by the Acquiescence Ruling and any new determination or decision on

readjudication will be subject to administrative and judicial review in

accordance with this subpart. Our denial of a request for

readjudication will not be subject to further administrative or

judicial review. If you file a request for readjudication within the

60-day appeal period and we deny that request, we shall extend the time

to file an appeal on the merits of the claim to 60 days after the date

that we deny the request for readjudication.

(3) After we receive a precedential circuit court decision and

determine that an Acquiescence Ruling may be required, we will begin to

identify those claims that are pending before us within the circuit and

that might be subject to a readjudication if an Acquiescence Ruling is

subsequently issued. When an Acquiescence Ruling is published, we will

send notices to those individuals whose cases we have identified which

may be affected by the Acquiescence Ruling. The notice will provide

information about the Acquiescence Ruling and the right to request a

readjudication under that Acquiescence Ruling, as described in

paragraph (b)(2) of this section. It is not necessary for an individual

to receive a notice in order to request application of an Acquiescence

Ruling to his or her claim, as described in paragraph (b)(2) of this

section.

Acquiescence Ruling. After we have published an Acquiescence Ruling to

reflect a holding of a United States Court of Appeals on an issue, we

may decide under certain conditions to relitigate that issue within the

same circuit. We will relitigate only when the conditions specified in

paragraphs (c) (2) and (3) of this section are met, and, in general,

one of the events specified in paragraph (c)(1) of this section occurs.

(1) Activating events:

(i) An action by both Houses of Congress indicates that a court

case on which an Acquiescence Ruling was based was decided

inconsistently with congressional intent, such as may be expressed in a

joint resolution, an appropriations restriction, or enactment of

legislation which affects a closely analogous body of law;

(ii) A statement in a majority opinion of the same circuit

indicates that the court might no longer follow its previous decision

if a particular issue were presented again;

(iii) Subsequent circuit court precedent in other circuits supports

our interpretation of the Social Security Act or regulations on the

issue(s) in question; or

(iv) A subsequent Supreme Court decision presents a reasonable

legal basis for questioning a circuit court holding upon which we base

an Acquiescence Ruling.

(2) The General Counsel of the Social Security Administration,

after consulting with the Department of Justice, concurs that

relitigation of an issue and application of our interpretation of the

Social Security Act or regulations at the administrative level within

the circuit would be appropriate.

(3) We publish a notice in the Federal Register that we intend to

relitigate an Acquiescence Ruling issue and that we will apply our

interpretation of the Social Security Act or regulations at the

administrative level within the circuit to claims selected for

relitigation. The notice will explain why we made this decision.

(d) Notice of relitigation. When we decide to relitigate an issue,

we will provide a notice explaining our action to all affected

claimants. In adjudicating claims subject to relitigation,

decisionmakers throughout the SSA administrative review process will

apply our interpretation of the Social Security Act and regulations,

but will also state in written determinations or decisions how the

claims would have been decided under the circuit standard. Claims not

subject to relitigation will continue to be decided under the

Acquiescence Ruling in accordance with the circuit standard. So that

affected claimants can be readily identified and any subsequent

decision of the circuit court or the Supreme Court can be implemented

quickly and efficiently, we will maintain a listing of all claimants

who receive this notice and will provide them with the relief ordered

by the court.

(e) Rescission of an Acquiescence Ruling. We will rescind as

obsolete an Acquiescence Ruling and apply our interpretation of the

Social Security Act or regulations by publishing a notice in the

Federal Register when any of the following events occurs:

(1) The Supreme Court overrules or limits a circuit court holding

that was the basis of an Acquiescence Ruling;

(2) A circuit court overrules or limits itself on an issue that was

the basis of an Acquiescence Ruling;

(3) A Federal law is enacted that removes the basis for the holding

in a decision of a circuit court that was the subject of an

Acquiescence Ruling; or

(4) We subsequently clarify, modify or revoke the regulation or

ruling that was the subject of a circuit court holding that we

determined conflicts with our interpretation of the Social Security Act

or regulations, or we subsequently publish a new regulation(s)

addressing an issue(s) not previously included in our regulations when

that issue(s) was the subject of a circuit court holding that

conflicted with our interpretation of the Social Security Act or

regulations and that holding was not compelled by the statute or

Constitution.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND

DISABLED

1. The authority citation for subpart N continues to read as

follows:

Authority: Sec. 702(a)(5), 1631, and 1633 of the Social Security

Act (42 U.S.C. 902(a)(5), 1383, and 1383b).

2. Section 416.1485 is revised to read as follows:

Sec. 416.1485 Application of circuit court law.

The procedures which follow apply to administrative determinations

[[Page 48967]]

decisions on claims involving the application of circuit court law.