SSR 95-2c: 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

SSR 95-2c

EFFECTIVE/PUBLICATION DATE: 06/16/95

20 CFR 404.957(c)(1)

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

Cir. 1992)

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.

e. 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. § 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.

II

The first question we must address is whether the federal courts have

jurisdiction. The pertinent statute, 42 U.S.C. § 405(g), provides, in

relevant part, as follows:

he 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.

II

The first question we must address is whether the federal courts have

jurisdiction. The pertinent statute, 42 U.S.C. § 405(g), provides, in

relevant part, as follows:

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).

III

er 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).

III

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 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 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).

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 § 17.5, at 629.

s 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 § 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. §

404.921 provides as follows:

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. §

404.921 provides as follows:

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

n, 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]

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.

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.

. 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.

[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.