SSR 88-10c: Rescinded 2006

Rescinded effective Dec 18, 2006

[FR 71-242 page 75800]

SSR 88-10c

EFFECTIVE/PUBLICATION DATE: 06/23/88

20 CFR 416.1520

Bowen v. Galbreath , U.S. Supreme Court, Civ. No. 86-1146

(2/24/88)

BRENNAN, Supreme Court Justice:

The question before us is whether, under Title XVI of the Social Security

Act, a district court has the authority to order the Secretary of Health

and Human Services to withhold a portion of past-due supplemental security

income benefits for the payment of attorney's fees.

After the Secretary of Health and Human Services denied Mary Alice

Galbreath's application for supplemental security income (SSI) benefits

under Title XVI of the Social Security Act, she appealed to a Federal

District Court. The District Court reversed the denial, and the Secretary

accordingly paid Galbreath her full $7,954 in past-due benefits.

Galbreath's attorney, Anthony W. Bartels, then moved for attorney's fees

equal to 25% of the past-due benefits. The District Court determined that

the amount requested was reasonable and, relying on 42 U.S.C. § 406(b)(1),

ordered the Secretary "to compute, certify, and pay" Bartels his requested

fee of $1988.50 out of the past-due benefits awarded Galbreath. The

Secretary appealed, arguing that § 406(b)(1) applies only to cases under

Title II of the Social Security Act and that the relevant statutes and

regulations do not permit withholding past-due SSI benefits for payments

of attorney's fees in Title XVI cases. The Court of Appeals for the Eighth

Circuit affirmed. 799 F.2d 370 (1986). We granted certiorari to resolve a

conflict among the Circuit Courts of Appeals, 481 U.S. _____ (1987), and

now reverse.

ses under

Title II of the Social Security Act and that the relevant statutes and

regulations do not permit withholding past-due SSI benefits for payments

of attorney's fees in Title XVI cases. The Court of Appeals for the Eighth

Circuit affirmed. 799 F.2d 370 (1986). We granted certiorari to resolve a

conflict among the Circuit Courts of Appeals, 481 U.S. _____ (1987), and

now reverse.

Title II is an insurance program. Enacted in 1935, it provides old-age,

survivor, and disability benefits to insured individuals irrespective of

financial need. See 42 U.S.C. §§ 403, 423 (1982 ed. and Supp. III).

Title XVI is a welfare program. Enacted in 1972, it provides SSI benefits to

financially needy individuals who are aged, blind, or disabled regardless

of their insured status. See 42 U.S.C. §§ 1382(a) (1982 ed. and Supp.

III).

Until 1965, Title II contained no provision expressly authorizing a

district court to award fees to a claimant's attorney. In 1965, however,

the Court of Appeals for the Fifth Circuit held that 42 U.S.C. § 405(g)

implicitly authorized district courts to order the payment of attorney's

fees out of past-due benefits. See Celebrezze v. Sparks , 342 F.2d

286 (CA5 1965). Under 42 U.S.C. § 405(g), a court reviewing a decision of

the Secretary has the power to enter "a judgment affirming, modifying, or

reversing the decision of the Secretary." The court in Sparks reasoned that where a statute gives a court jurisdiction, it must be

presumed, absent any indication to the contrary, that the court was

intended to exercise all the powers of a court, including the power to

provide for payment of attorney's fees out of any recovery. 342 F.2d, at

288-289. Later in 1965, Congress effectively codified Sparks by

adding a new subsection (b)(1) to 42 U.S.C. § 406 that allows withholding

of past-due benefits to pay attorney's fees incurred in judicial

proceedings under Title II. Social Security Amendments of 1965, Pub. L.

89-97, § 332, 79 Stat. 403

the power to

provide for payment of attorney's fees out of any recovery. 342 F.2d, at

288-289. Later in 1965, Congress effectively codified Sparks by

adding a new subsection (b)(1) to 42 U.S.C. § 406 that allows withholding

of past-due benefits to pay attorney's fees incurred in judicial

proceedings under Title II. Social Security Amendments of 1965, Pub. L.

89-97, § 332, 79 Stat. 403. Subsection (b)(1) provides:

In 1968, Congress amended 42 U.S.C. § 406(a) by adding two sentences

giving the Secretary similar withholding authority to pay attorney's fees

incurred in Title II administrative proceedings. Social Security

Amendments of 1967, Pub. L. 90-248, § 173, 81 Stat. 877.

Thus, the District Court's order in this case would clearly be valid if

this were a Title II case. When Congress enacted Title XVI in 1972,

however, it provided no similar authority to withhold past-due benefits

for attorney's fees. This omission is particularly telling because

Congress incorporated many other provisions of Title II into Title XVI. In

particular, while incorporating almost every other provision of § 406 into

Title XVI, Congress left out the provisions in § 406(b)(1) and § 406(a)

that authorized judicial withholding and administrative withholding.

Social Security Amendments of 1972, Pub. L. 92-603, § 301 86 Stat.

1476-1477, codified at 42 U.S.C. § 1383(d)(2). This omission does not

appear to have been inadvertent. Indeed, with respect to administrative

proceedings, the House Report specifically noted and explained the

omission of withholding authority by twice stating:

The Senate Report also indicates the omission of administrative

withholding authority was intentional. See S. Rep. No. 92-1230, p. 392

477, codified at 42 U.S.C. § 1383(d)(2). This omission does not

appear to have been inadvertent. Indeed, with respect to administrative

proceedings, the House Report specifically noted and explained the

omission of withholding authority by twice stating:

The Senate Report also indicates the omission of administrative

withholding authority was intentional. See S. Rep. No. 92-1230, p. 392

(1972) ("Where an individual who has requested a hearing is represented

before the Secretary by an attorney . . . there would be no withholding of

attorney fees from the individual's benefits"). Although the legislative

history offered no explanation specifically linked to the omission of

judicial withholding authority, it is fair to assume that this omission

also reflected Congress' view that withholding past-due SSI benefits would

be inconsistent with the purpose of the program. Given the extreme

financial need of SSI beneficiaries, this view is not irrational. Nor

would it be odd for Congress to conclude that withholding past-due

benefits from financially needy individuals under Title XVI would cause

greater hardship than withholding past-due benefits from insured

individuals under Title II. We thus conclude that, as originally enacted,

Title XVI evidenced a congressional intent not to allow the withholding of

past-due SSI benefits to pay attorney's fees incurred in judicial

proceedings.

Respondent and the courts finding judicial withholding authority under

Title XVI do not dispute the conclusion that Congress intended to disallow

judicial withholding when it enacted Title XVI in 1972. Rather, they

contend the courts possess inherent authority to order withholding and

that a 1976 amendment to 42 U.S.C. §1383(c)(3) — the judicial review

provision of Title XVI — demonstrates Congress' intent to allow that

authority to be exercised. As enacted in 1972, 42 U.S.C. § 1383(c)(3)

(1970 ed., Supp. IV) provided:

disallow

judicial withholding when it enacted Title XVI in 1972. Rather, they

contend the courts possess inherent authority to order withholding and

that a 1976 amendment to 42 U.S.C. §1383(c)(3) — the judicial review

provision of Title XVI — demonstrates Congress' intent to allow that

authority to be exercised. As enacted in 1972, 42 U.S.C. § 1383(c)(3)

(1970 ed., Supp. IV) provided:

The 1976 amendment simply deleted the italicized portion of the statute.

Act of Jan. 2, 1976, Pub. L. 94-202, 89 Stat. 1135. The clear and

expressed intent was to make the Secretary's factual findings under Title

XVI subject to judicial review, just as they were under Title II. Nothing

in the legislative history mentions withholding benefits to pay attorney's

fees. The Court of Appeals below and other courts have nonetheless

reasoned that, because Congress intended to make judicial review under

Title XVI the same as judicial review under Title II, courts adjudicating

Title XVI cases must have the same inherent authority to order withholding

under §405(g) that, under Sparks , courts adjudicating Title II

cases had even before § 406(b)(1) was added.

We find this analysis unpersuasive. On its face, the deletion of a

provision making factual findings unreviewable bears no apparent relation

to whether withholding of past-due benefits should be allowed. Indeed, the

deletion does not even purport to address cases involving legal, rather

than factual, disputes, and we can hardly imagine that Congress meant to

change the ban on withholding without addressing both kinds of cases. The

courts that have concluded that the 1976 amendment authorizes judicial

withholding rely on statements in the legislative history indicating

Congress' intent to make judicial review under Title II and Title XVI

"virtually identical," to "provide the same rights to . . . judicial

review" under both Titles, and "to apply the same rules of judicial review

to Title XVI cases as apply to Title II cases." S. Rep

oncluded that the 1976 amendment authorizes judicial

withholding rely on statements in the legislative history indicating

Congress' intent to make judicial review under Title II and Title XVI

"virtually identical," to "provide the same rights to . . . judicial

review" under both Titles, and "to apply the same rules of judicial review

to Title XVI cases as apply to Title II cases." S. Rep. No. 94-550, pp. 1,

3-4 (1975). None of these statements suggests that Congress intended to

allow withholding of past-due benefits. Rather, they simply state the

obvious point that removing the provision barring review under Title XVI

of the Secretary's factual determinations makes the scope of issues

reviewable under Title XVI and Title II the same. Even assuming courts

have inherent authority under Sparks to withhold a portion of

past-due SSI benefits to pay attorney's fees in Title XVI cases, we see no

reason why Congress cannot divest courts of that authority if it so

chooses. In originally enacting Title XVI, Congress manifested its intent,

by selective incorporation and legislative history, to disallow the

withholding of past-due SSI benefits to pay attorney's fees incurred in

Title XVI cases. Until Congress sees fit to override its original

decision, by amending Title XVI in a way that manifests an intent to allow

withholding, that original decision stands.

The judgment of the Court of Appeals is

Reversed.

JUSTICE KENNEDY took no part in the consideration or decision of this

case.