AR 90-4(4): Culbertson v. Secretary of Health and Human Services , 859 F.2d 319 (4th Cir. 1988); Young v. Bowen , 858 F.2d 951 (4th Cir. 1988) -- Waiver of Administrative Finality in Proceedings Involving Unrepresented Claimants Who Lack the Mental Competence to Request Administrative Review -- Titles II and XVI of the Social Security Act.

AR 90-4(4)

EFFECTIVE/PUBLICATION DATE: 07/16/90

ISSUE:

Whether the rules of administrative finality apply to proceedings

involving unrepresented claimants who lack the mental competence to

request reconsideration or request a hearing before an Administrative Law

Judge.

STATUTE/REGULATION/RULING CITATION:

Sections 205(a) and 1631(d)(1) of the Social Security Act (42 U.S.C.

405(a) and 1383(d)(1)), 20 C.F.R. 404.900(b), 404.905, 404.921, 404.987,

404.988, 416.1400(b), 416.1405, 416.1421, 416.1487, and 416.1488.

CIRCUIT:

Fourth (Maryland, North Carolina, South Carolina, Virginia, West

Virginia)

Culbertson v. Secretary of Health and Human Services , 859 F.2d 319

(4th Cir. 1988); Young v. Bowen , 858 F.2d 951 (4th Cir. 1988).

APPLICABILITY OF RULING

This Ruling applies to determinations or decisions at all administrative

levels (i.e., initial, reconsideration, administrative law judge hearing

and Appeals Council).

DESCRIPTION OF CASES:

Culbertson

On January 6, 1976, an application for child's insurance benefits based

on disability was filed on behalf of a 30 year old claimant by her father.

The application alleged that the claimant had been mentally retarded and

disabled since her birth on March 12, 1945. The application was denied on

February 27, 1976. The claimant herself filed a second application on

October 11, 1977, again alleging that she had been mentally retarded since

birth. This application was also denied initially. The claimant, who was

not represented by legal counsel with regard to either the first or second

application, did not seek reconsideration on either application.

, 1945. The application was denied on

February 27, 1976. The claimant herself filed a second application on

October 11, 1977, again alleging that she had been mentally retarded since

birth. This application was also denied initially. The claimant, who was

not represented by legal counsel with regard to either the first or second

application, did not seek reconsideration on either application.

The claimant filed her third and most recent application for benefits on

September 22, 1980. Following an initial denial, she obtained legal

counsel and filed a request for reconsideration. Upon denial of her

reconsideration, she requested a hearing before an administrative law

judge. After a hearing, the ALJ concluded that the claimant had proved the

existence of "an overwhelming nonexertional impairment which rendered her

disabled prior to age 22." The ALJ also determined that the February 27,

1976, initial determination to deny benefits should be reopened and

revised to grant benefits based on her first application.

On its own motion, the Appeals Council reviewed the ALJ's decision,

reversed the award based on the claimant's first application, and remanded

the case for further proceedings. The Council reasoned that an

administrative determination more than four years old could not be

reopened. In the Council's view the first determination was final and

could not be reopened under regulation 20 C.F.R. 404.988.

Upon remand, the ALJ again concluded that the claimant was disabled as a

result of a severe mental impairment and reopened the 1976 application

because the claimant's mental and emotional impairments had prevented her

from pursuing her appeal rights with regard to the 1976 application. The

Appeals Council reviewed the decision and agreed that the claimant had

been under a continuous disability which commenced prior to her twenty-

second birthday. However, the Council concluded that retroactive benefits

could be awarded only with regard to her second application.

and emotional impairments had prevented her

from pursuing her appeal rights with regard to the 1976 application. The

Appeals Council reviewed the decision and agreed that the claimant had

been under a continuous disability which commenced prior to her twenty-

second birthday. However, the Council concluded that retroactive benefits

could be awarded only with regard to her second application.

The claimant then sought judicial review of the Appeals Council decision.

The district court remanded the case for further administrative

proceedings and on remand the ALJ again reopened the first determination.

The Appeals Council overruled the ALJ's decision regarding this reopening.

The district court upon reviewing the Secretary's final decision after its

remand order concluded that, because the claimant's father filed the first

application on her behalf, it was the mental competence of the claimant's

father that controlled any due process analysis of the Secretary's

decision. The court again remanded the case so that the Agency could

consider the father's mental competency. The claimant appealed that order

to the United States Court of Appeals for the Fourth Circuit alleging that

both the district court's remand order and the Secretary's decision not to

reopen her first application were contrary to Fourth Circuit law.

Young

The claimant filed applications for disability insurance benefits and

Supplemental Security Income (SSI) on December 10, 1979, alleging

disability due to mental illness beginning December 30, 1977. These

applications were denied initially and upon reconsideration. The claimant,

who was not represented by legal counsel, did not request further

administrative review. She filed her second application for SSI on July 7,

1980 and was again denied initially on March 9, 1981. Still without

representation, she did not appeal this determination. On March 18, 1983

she filed her third application for SSI. This application was denied

initially and upon reconsideration

laimant,

who was not represented by legal counsel, did not request further

administrative review. She filed her second application for SSI on July 7,

1980 and was again denied initially on March 9, 1981. Still without

representation, she did not appeal this determination. On March 18, 1983

she filed her third application for SSI. This application was denied

initially and upon reconsideration. The claimant, then represented by

counsel, filed a request for hearing. After a hearing, the ALJ issued a

decision denying her application. This became the final decision of the

Secretary when the Appeals Council denied her request for review. The

claimant then sought judicial review.

During the time her civil action was pending, Congress enacted the Social

Security Disability Benefits Reform Act of 1984. Pursuant to that

legislation, the claimant's case was remanded for further administrative

proceedings.

In accordance with the remand a supplemental hearing was held on December

13, 1986. The claimant submitted extensive new medical evidence and

requested that her prior applications be reopened. The ALJ, in a

recommended decision, found that she was disabled under section 12.05(c)

of the Listing of Impairments in Appendix 1 to Subpart P of Social

Security Administration Regulations No. 4, but refused to reopen her prior

applications. The Appeals Council (AC) agreed that the claimant was

disabled and entitled to SSI benefits, but not on the basis of 12.05(c).

The AC refused to reopen her prior applications because they found that

the claimant was not disabled during the periods covered by those

applications. The claimant returned to district court alleging that she

had lacked the mental capacity to contest the denial of benefits based on

her earlier applications and that the Secretary's refusal to reopen those

applications was a violation of constitutional due process. The district

court affirmed the Secretary's decision

claimant was not disabled during the periods covered by those

applications. The claimant returned to district court alleging that she

had lacked the mental capacity to contest the denial of benefits based on

her earlier applications and that the Secretary's refusal to reopen those

applications was a violation of constitutional due process. The district

court affirmed the Secretary's decision. The claimant then appealed to the

United States Court of Appeals for the Fourth Circuit.

HOLDINGS:

Culbertson

The Court of Appeals for the Fourth Circuit stated that it viewed the

district court's order as a final denial of claimant's appeal making it

appropriate for review by the Circuit Court.

The court of appeals disagreed with the district court and held that it

was the mental competency of the claimant, not the claimant's father, that

was at issue. The court distinguished its earlier holding in Robinson

v. Heckler , 783 F.2d 1144 (4th Cir. 1983) on the basis that in Robinson the claimant's mother was serving as her legal guardian,

whereas in the instant case, Culbertson's father was neither her legal

guardian nor her legal representative. The court described Culbertson's

father as only a "willing volunteer" who merely filed the application for

his daughter, without any responsibility for furthering her claim. The

court prohibited the Secretary from binding a claimant to an adverse

ruling when that individual lacked both the mental competence and legal

assistance necessary to contest the initial determination. The court held

that the Secretary may not utilize the administrative finality regulations

in such a fashion as "to deny a pro se mentally impaired claimant a full

and fair opportunity to establish a statutory entitlement" to benefits.

The court concluded that the Secretary could not refuse to reopen the

claimant's 1976 application after the claimant established a prima

facie case of mental incompetence in 1976 unless he first refuted that

showing.

Young

tive finality regulations

in such a fashion as "to deny a pro se mentally impaired claimant a full

and fair opportunity to establish a statutory entitlement" to benefits.

The court concluded that the Secretary could not refuse to reopen the

claimant's 1976 application after the claimant established a prima

facie case of mental incompetence in 1976 unless he first refuted that

showing.

Young

The Fourth Circuit stated that "It offends fundamental fairness, . . .,

to bind a claimant to an adverse ruling who lacks both the mental

competency and the legal assistance necessary to contest the initial

determination. . . . [I]t operates with equal force whether the Secretary

relies upon res judicata or some other procedural limitation." The

court went on to state that it was of no moment that more than four years

had passed before the claimant who was unrepresented at the time of her

previous determinations sought to have them reopened. Accordingly, the

court held that once the claimant presented proof that mental illness

prevented her from understanding the procedure necessary to obtain an

evidentiary hearing after the denial of her prior claim, the Secretary

could not decline to reconsider the previous claim because of res

judicata or administrative finality unless he first conducted an

evidentiary hearing and rebutted the prima facie case.

After review of the evidence of record, the Fourth Circuit found that the

claimant's mental condition rendered her unable to pursue her prior

applications for benefits through a full administrative appeal and that

"[t]o the extent, therefore, that the Secretary has purported to refuse to

reopen those claims on procedural grounds, whether designated as res

judicata or administrative finality, the decision must be

overturned."

STATEMENT AS TO HOW CULBERTSON AND YOUNG DIFFER FROM

SOCIAL SECURITY POLICY:

er unable to pursue her prior

applications for benefits through a full administrative appeal and that

"[t]o the extent, therefore, that the Secretary has purported to refuse to

reopen those claims on procedural grounds, whether designated as res

judicata or administrative finality, the decision must be

overturned."

STATEMENT AS TO HOW CULBERTSON AND YOUNG DIFFER FROM

SOCIAL SECURITY POLICY:

SSA policy reflected in sections 404.988 and 416.1488 of Social Security

Administration Regulations No. 4 and 16 (20 C.F.R. 404.988 and 416.1488)

is that administrative determinations and decisions are final if they are

not appealed to the next step in the administrative review process within

60 days. 20 C.F.R. 404.988 and 416.1488 set out the rules for reopening

and revising final determinations and decisions. These rules provide that,

after four years from the date of the notice of the initial determination

in Title II cases and two years in Title XVI cases, a final determination

or decision can be reopened only for a reason listed in 404.988(c) or

416.1488(c), respectively. The regulations do not provide that a final

determination or decision can be reopened and revised if the claimant can

establish that he or she was unrepresented and lacked the mental

competence to request administrative review.

The holdings in Culbertson and Young mandate that SSA

reopen an otherwise final administrative determination at any time when a

claimant, who had no individual legally responsible for prosecuting the

claim (e.g., a parent of a claimant who is a minor, legal guardian,

attorney, or other legal representative) at the time of the prior

determination, establishes a prima facie case that mental

incompetence prevented him or her from understanding the procedure

necessary to request administrative review, unless it holds an evidentiary

hearing and determines that mental incompetence did not prevent the

claimant from filing a timely appeal.

minor, legal guardian,

attorney, or other legal representative) at the time of the prior

determination, establishes a prima facie case that mental

incompetence prevented him or her from understanding the procedure

necessary to request administrative review, unless it holds an evidentiary

hearing and determines that mental incompetence did not prevent the

claimant from filing a timely appeal.

EXPLANATION OF HOW SSA WILL APPLY THE DECISIONS WITHIN THE

CIRCUIT:

This ruling applies only to cases in which the claimant resides in

Maryland, North Carolina, South Carolina, Virginia, or West Virginia.

Where an initial or reconsideration determination based on an application

filed by or on behalf of a claimant, who had no individual legally

responsible for prosecuting the claim (e.g., a parent of a claimant who is

a minor, legal guardian, attorney, or other legal representative), has

become final (i.e., the 60 day time limit for requesting administrative

review has expired) and the claimant presents a prima facie case

that mental incompetence prevented him or her from understanding the

procedures necessary to contest that determination, SSA will determine

whether the claimant actually did not understand the procedures necessary

for requesting review of the prior determination. If the adjudicator

determines that a prima facie case is sufficiently conclusive to

establish that the claimant did not have the mental competence necessary

to request review of the prior determination, then he or she will not

apply res judicata or administrative finality, but will reopen the

prior determination and issue a revised determination. However, if there

is a question of the sufficiency of the prima facie case, the

adjudicator will hold an evidentiary hearing to determine the claimant's

mental competence at the time of the prior determination.

est review of the prior determination, then he or she will not

apply res judicata or administrative finality, but will reopen the

prior determination and issue a revised determination. However, if there

is a question of the sufficiency of the prima facie case, the

adjudicator will hold an evidentiary hearing to determine the claimant's

mental competence at the time of the prior determination.

If the adjudicator determines that mental incompetence prevented the

claimant from understanding the procedures for requesting administrative

review of a determination, he or she will not apply res judicata or

administrative finality even if more than four years have elapsed (two

years in Title XVI cases), but will consider the case on its merits and

issue a determination or decision that is subject to further

administrative review.

If the adjudicator determines that the claimant was capable of

understanding the procedures necessary to request administrative review,

he or she will apply the normal rules of res judicata or

administrative finality and adjudicate the pending claim, as

appropriate.