SSR 19-1p: Titles II and XVI: Effect of the Decision in Lucia v. Securities and Exchange Commission (SEC) on Cases Pending at the Appeals Council

Effective Date: March 15, 2019 Federal Register,

vol. 84, No. 51, page 9582 .

Policy Interpretation Ruling

Social Security Ruling (SSR)

Purpose: This ruling explains how we will

adjudicate cases pending at the Appeals Council in which the claimant

has raised a timely challenge to the appointment of an administrative

law judge (ALJ) under the Appointments Clause of the United States

Constitution in light of the Supreme Court’s decision in Lucia v. SEC , 138 S. Ct. 2044 (2018).

Citations: 20 CFR 404.970 , 404.976(b) , 416.1470 , and 416.1476(b) .

Background: In Lucia , the Supreme Court

considered a challenge to the manner in which the SEC appointed its

ALJs. The Supreme Court held that the SEC’s ALJs are

“Officers of the United States” within the

meaning of the Appointments Clause of the United States

Constitution, Art. II, § 2, cl. 2. [1] As a result, the SEC’s ALJs should

have been (but were not) appointed to their positions by

either the President, a court of law, or the Department

head. The Supreme Court reversed the lower court’s

decision finding that the SEC’s ALJs were not

inferior officers. Having determined that Lucia had raised

a timely challenge to the ALJ’s appointment, the

Supreme Court remanded the case for a new hearing before a

properly appointed ALJ who had not previously heard the

case, or before the SEC itself. [2] The Supreme Court’s decision in Lucia did not specifically address the constitutional

status of ALJs who work in other Federal agencies,

including the Social Security Administration (SSA). To

address any Appointments Clause questions involving Social

Security claims, and consistent with guidance from the

Department of Justice, on July 16, 2018 the Acting

Commissioner of Social Security ratified the appointments

of our ALJs and approved those appointments as her

own. [3] On the same day, the

Acting Commissioner took the same actions with respect to

the administrative appeals judges (AAJs) who work at the

Appeals Council

g Social

Security claims, and consistent with guidance from the

Department of Justice, on July 16, 2018 the Acting

Commissioner of Social Security ratified the appointments

of our ALJs and approved those appointments as her

own. [3] On the same day, the

Acting Commissioner took the same actions with respect to

the administrative appeals judges (AAJs) who work at the

Appeals Council. [4] We are

issuing this SSR to explain how the Appeals Council will

adjudicate appeals in which the claimant timely raises an

Appointments Clause challenge to the authority of the ALJ

who decided or dismissed a claim.

Policy Interpretation:

We receive millions of applications for benefits

each year. [5] The essential

requirement for any system of administrative review in a

program as large and complex as ours is that it “must

be fair--and it must work.” [6] In adjudicating the millions of claims

we receive each year, we strive to balance the two

overriding concerns of fairness and efficiency, consistent

with the law. The Social Security system must be fair and

accurate and provide each claimant with appropriate due

process protections. At the same time, the Supreme Court

has recognized that we must make decisions efficiently in

order to ensure that the system continues to work and serve

the American people. [7] Because we employ more ALJs than all other Federal agencies

combined, and our ALJs issue hundreds of thousands of

decisions each year, Lucia has the potential to

significantly affect our hearings and appeals process. To

properly address the issues Lucia raises in the context of

our hearings and appeals system, we have determined that

some claimants are entitled to additional administrative

review of their claims.

A claimant who is dissatisfied with an ALJ’s

decision, or the dismissal of a request for a hearing, may

request that the Appeals Council review the decision or

dismissal. Under our regulations, the Appeals Council will

review a case if:

context of

our hearings and appeals system, we have determined that

some claimants are entitled to additional administrative

review of their claims.

A claimant who is dissatisfied with an ALJ’s

decision, or the dismissal of a request for a hearing, may

request that the Appeals Council review the decision or

dismissal. Under our regulations, the Appeals Council will

review a case if:

(1) there appears to be an abuse of discretion by

the ALJ;

(2) there is an error of law;

(3) the ALJ’s action, findings or conclusions are

not supported by substantial evidence;

(4) there is a broad policy or procedural issue that may

affect the general public interest; or

(5) the Appeals Council receives additional evidence

that the claimant shows is new, material, and relates to

the period on or before the date of the ALJ hearing

decision, and there is a reasonable probability that the

evidence would change the outcome of the decision. [8]

We interpret some challenges to the ALJ’s

authority to hear and decide a claim, based on the Supreme

Court’s decision in Lucia , as raising “a broad

policy or procedural issue that may affect the general

public interest” within the meaning of our

regulations. Challenges to an ALJ’s authority to

decide a claim may raise a broadly applicable procedural

issue independent of the merits of the individual claim for

benefits—that is, whether the ALJ who presided over

the claimant’s hearing was properly appointed under

the Appointments Clause of the Constitution. We will

process requests for review that include a timely

administrative challenge to the ALJ’s authority based

on the Appointments Clause in the manner described below.

cedural

issue independent of the merits of the individual claim for

benefits—that is, whether the ALJ who presided over

the claimant’s hearing was properly appointed under

the Appointments Clause of the Constitution. We will

process requests for review that include a timely

administrative challenge to the ALJ’s authority based

on the Appointments Clause in the manner described below.

The Appeals Council will grant the claimant’s

request for review in cases where the claimant: (1) timely

requests Appeals Council review of an ALJ’s decision

or dismissal issued before July 16, 2018; and (2) raises

before us (either at the Appeals Council level, or

previously had raised at the ALJ level) a challenge under

the Appointments Clause to the authority of the ALJ who

issued the decision or dismissal in the case.

When the Appeals Council grants review based on a

timely-raised Appointments Clause challenge, AAJs who have

been appointed by the Acting Commissioner (or whose

appointments the Acting Commissioner has ratified) will

vacate the hearing decision or dismissal. [9] In cases in which the ALJ made a

decision, the Appeals Council will conduct a new and

independent review of the claims file and either remand the

case to an ALJ other than the ALJ who issued the decision

under review, or issue its own new decision about the claim

covering the period before the date of the ALJ’s

decision. In its review, the Appeals Council will not

presume that the prior hearing decision was correct. [10]

In cases in which the ALJ dismissed a request for a

hearing, the Appeals Council will vacate the ALJ’s

dismissal order. [11] It will

then either: (1) decide whether the request for a hearing

should be dismissed, or (2) remand the case to another ALJ

to determine that issue.

decision. In its review, the Appeals Council will not

presume that the prior hearing decision was correct. [10]

In cases in which the ALJ dismissed a request for a

hearing, the Appeals Council will vacate the ALJ’s

dismissal order. [11] It will

then either: (1) decide whether the request for a hearing

should be dismissed, or (2) remand the case to another ALJ

to determine that issue.

When the Appeals Council grants a claimant’s

request for review in cases that raise a timely

Appointments Clause challenge, the claimant may request a

reasonable opportunity to file briefs or other written

statements about the facts and law relevant to the

case. [12] Our regulations also

allow a claimant to request to appear before the Appeals

Council to present oral argument. [13] If the Appeals Council decides that the

case raises an important question of law or policy, or that

oral argument would help to reach the proper result, the

Appeals Council will grant the request to appear. If the

Appeals Council grants a request to appear and holds oral

argument, it will notify the claimant and his or her

representative about the time and place at least 10 days

before the date scheduled for the appearance. [14] The Appeals Council will determine

whether the appearance, or the appearance of any other

person relevant to the proceeding, will be in person, by

video teleconferencing, or by telephone. [15]

a request to appear and holds oral

argument, it will notify the claimant and his or her

representative about the time and place at least 10 days

before the date scheduled for the appearance. [14] The Appeals Council will determine

whether the appearance, or the appearance of any other

person relevant to the proceeding, will be in person, by

video teleconferencing, or by telephone. [15]

When the Appeals Council grants a request for

review, it will mail a notice to all parties at their last

known address stating the reasons for the review and the

issues to be considered. [16] Consistent with our regulations, the Appeals Council will

consider all the evidence in the ALJ hearing record, as

well as additional evidence subject to the limitations on

Appeals Council consideration of additional evidence in 20 CFR 404.970 and 416.1470 .

The Appeals Council will also

consider any arguments the claimant or representative made

in writing or at the hearing and will also consider any

additional arguments submitted to it.

The Appeals Council will either remand the case to

a different ALJ; issue a new, independent decision; or, as

appropriate, issue an order dismissing the request for a

hearing. When the Appeals Council issues a decision, its

decision may result in different findings from the ALJ

hearing decision that the Appeals Council vacated. [17] When the Appeals Council grants

review and issues its own decision, its decision will be

based on the preponderance of the evidence. [18]

[1] The

Supreme Court explained in Lucia that “[t]he Appointments Clause

prescribes the exclusive means of appointing “Officers.’ Only the

President, a court of law, or a head of department can do so. See Art. II, § 2, cl. 2.” Lucia v. SEC , 138 S. Ct. 2044, 2051

peals Council grants

review and issues its own decision, its decision will be

based on the preponderance of the evidence. [18]

[1] The

Supreme Court explained in Lucia that “[t]he Appointments Clause

prescribes the exclusive means of appointing “Officers.’ Only the

President, a court of law, or a head of department can do so. See Art. II, § 2, cl. 2.” Lucia v. SEC , 138 S. Ct. 2044, 2051

(2018).

[2] Lucia

v. SEC, 138 S. Ct. at 2055.

[3] See

Social Security Emergency Message (EM) 18003 REV 2, § B (available at: https://secure.ssa.gov/apps10/reference.nsf/links/08062018021025PM ).

[4] Id.

[5] In

fiscal year 2017, we completed 5.62 million retirement and survivors

insurance claims and 2.485 million initial disability claims. We

also received 620,000 hearing requests, and completed 686,000

hearings. FY 2019 Congressional Justification, at 6 (available at: https://www.ssa.gov/budget/FY19Files/2019CJ.pdf ).

[6] Richardson v. Perales , 402 U.S. 389, 399 (1971).

[7] For

example, in Barnhart v. Thomas , 540 U.S. 20, 28-29 (2003), the Supreme

Court stated that, “As we have observed, ‘[t]he Social

Security hearing system is probably the largest adjudicative system in

the western world.’. . . The need for efficiency is

self-evident.’ ” (quoting Heckler v. Campbell ,

461 U.S. 458, 461 n.2 (1983)).

[8] 20 CFR 404.970(a)

and (b) , 416.1470(a)

and (b) .

[9] Under

our regulations, whenever the Appeals Council reviews a hearing decision

under 20 CFR 404.967 , 404.969 , 416.1467 , or 416.1469 ,

and the claimant does not appear personally or through representation

before the Appeals Council to present oral argument, the Appeals

Council’s review will be conducted by a panel of not less than two

members of the Appeals Council designated in the manner prescribed by the

Chairman or Deputy Chairman of the Council

hearing decision

under 20 CFR 404.967 , 404.969 , 416.1467 , or 416.1469 ,

and the claimant does not appear personally or through representation

before the Appeals Council to present oral argument, the Appeals

Council’s review will be conducted by a panel of not less than two

members of the Appeals Council designated in the manner prescribed by the

Chairman or Deputy Chairman of the Council. In the event of disagreement

between a panel composed of only two members, the Chairman or Deputy

Chairman, or his or her delegate, who must be a member of the Council,

shall participate as a third member of the panel. When the claimant

appears in person or through representation before the Appeals Council,

the review will be conducted by a panel of not less than three members

of the Council designated in the manner prescribed by the Chairman or

Deputy Chairman. Concurrence of a majority of a panel shall constitute

the decision of the Appeals Council unless the case is considered by

the Appeals Council en banc or as a representative body, as provided in 20 CFR 422.205 . See 20

CFR 422.205(b) .

[10] 20 CFR 404.979 , 416.1479 .

[11] 20 CFR

404.960(a) , 416.1460(a) .

[12] 20 CFR 404.975 , 416.1475 .

[13] 20 CFR

404.976(b) , 416.1476(b) .

[14] Id.

[15] Id.

[16] 20 CFR 404.973 , 416.1473

[17] 20 CFR 404.979 , 416.1479 .

[18] Id.

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