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Barnett v. Bowen

May 30, 1986

CARROLL BARNETT AND HAROLD MCBRINE, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-APPELLANTS, SARAH SARGENT, HARVEY J. LEVIGNE, HATTIE MCGIVERN AND RAYMOND GRENIER, INTERVENING PLAINTIFFS,
v.
OTIS R. BOWEN, IN HIS OFFICIAL CAPACITY AS SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE, LEON S. DAY, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY, SITUATED, PLAINTIFF-APPELLANT, AMEDIE MAURAIS, PLAINTIFF-INTERVENOR-APPELLANT, V. OTIS R. BOWEN, IN HIS OFFICIAL CAPACITY AS SECRETARY DEPARTMENT OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE



Consolidated appeal from orders of United States District Court for the District of Vermont, James S. Holden, J., dismissing class actions by Vermont social security disability applicants. Reversed and remanded.

Author: Feinberg

FEINBERG, Chief Judge:

This is a consolidated appeal from orders of Judge James S. Holden of the United States Court for the District of Vermont, which dismissed two class actions brought on behalf of social security disability applicants.*fn1 The first case, Day v. Bowen, No. 85-6315 (hereafter Day), involved the proceedings on remand from the Supreme Court in Heckler v. Day, 467 U.S. 104, 81 L. Ed. 2d 88, 104 S. Ct. 2249 (1984). On remand, the district judge vacated his injunction, which had imposed 90-day deadlines for reconsideration determinations and administrative hearings reviewing denial of social security disability benefits under Title II of the Social Security Act (the Act), 42 U.S.C. § 401 et seq. The judge also concluded that Heckler v. Day foreclosed any other form of class-wide relief and dismissed the class action. In the second case, Barnett v. Bowen, No. 85-6252 (hereafter Barnett), Judge Holden also vacated an injunction which had created a 90-day deadline for administrative hearings following denial of disability benefits under Title XVI of the Act, 42 U.S.C. § 1381 et seq. He denied further class-wide relief and dismissed the class action. Because we believe that Heckler v. Day does not foreclose all class-wide relief, we reverse those portions of the district court's orders that deny all class-wide relief and dismiss the class actions. We remand to the district court for further consideration of appropriate remedial action.

I.

The complicated facts underlying these lengthy proceedings are described in our two earlier opinions, Day v. Schweiker, 685 F.2d 19 (2d Cir. 1982) and Barnett v. Califano, 580 F.2d 28 (2d Cir. 1978), and in the Supreme Court's opinion in Heckler v. Day, supra. We set forth below only those facts essential to an understanding of the appeals now before us.

Plaintiffs in Day are a class of applicants for Old Age, Survivors and Disability Insurance (OASDI) benefits under Title II of the Act U.S.C. § 401 et seq. They challenged delays in two stages of the four-step administrative review process for disability claims. That process begins with a state agency's initial determination of eligibility, 42 U.S.C. § 421(a); 20 C.F.R. § 404.1503; if declared ineligible, the claimant may request a de novo reconsideration of the initial determination. 20 C.F.R. §§ 404.907-404.921. If the reconsideration determination is adverse, the claimant is entitled to a hearing before an Administrative Law Judge (ALJ). 42 U.S.C. § 405(b); 20 C.F.R. §§ 404.929-404.961. The claimant can appeal an ALJ's decision to the Appeals Council of the Department of Health and Human Services. 20 C.F.R. §§ 404.967-404.983. After exhausting these fourth steps, the claimant can seek judicial review in federal district court. 42 U.S.C. § 405(g).

Day involved delays in issuing reconsideration determinations and in scheduling hearings. Plaintiffs filed on 42 U.S.C. § 405(b), which entitles OASDI claimants to "reasonable notice and opportunity for a hearing" after an adverse determination. The district court certified a statewide class of applicants who experience "an unreasonable delay in the scheduling of and/or issuance of decisions in reconsiderations and fair hearings." Finding that delays of more than 90 days for both reconsiderations and hearings violated section 405(b), the district court granted summary judgment to the plaintiff class. The court then imposed mandatory 90-day deadlines for both reconsideration determinations and hearings,*fn2 and provided for payment of interim benefits if certain deadlines were exceeded. This court affirmed. 685 F.2d 19 (2d Cir. 1982).

In his opinion for the majority, Justice Powell relied on "Congress' continuing concern that mandatory deadlines would subordinate quality to timeliness, and its recent efforts to ensure the quality to timeliness, and its recent efforts to ensure the quality of agency determinations," 467 U.S. at 117, to strike down the 90-day time limits. The Court held that "in light of the unmistakable intention of Congress, it would be an unwarranted judicial intrusion into this pervasively regulated area for federal courts to issue injunctions imposing deadlines with respect to future disability claims." Id. at 119. In a footnote, reproduced in full in the margin,*fn3 the Court stated that "nothing in this opinion precludes the proper use of injunctive relief to remedy individual violations of § 405(b)." Id. at 119 n.33 (emphasis in original). The Court vacated the decision of this court and remanded the case for further proceedings consistent with its opinion. Id. at 119. This court thereafter summarily remanded the case to the district court.

Barnett, which was begun in 1974 (several years before Day), challenged similar delays in scheduling hearings to review adverse reconsideration determinations for applicants for Supplemental Security Income (SSI) disability benefits, pursuant to Title XVI of the Act, 42 U.S.C. § 1381 et seq. Plaintiffs claimed that these delays violated 42 U.S.C. § 1383(c)(1), which states that "the Secretary shall provide reasonable notice and opportunity for a hearing," the Administrative Procedure Act (APA) and the due process clause. District Judge Coffrin certified a statewide class of "all present and future applicants for SSI disability benefits whose initial claims are denied... and who subsequently request a reconsideration hearing." Finding violations of section 1383(c)(1) and the APA, he ordered the Secretary to schedule hearings within 90 days of requests by SSI claimants and also provided for payment of non-refundable benefits if this time limit was exceeded. This court affirmed the judgment except as to the payment of non-refundable benefits. 580 F.2d 28 (2d Cir. 1978). Neither side sought review by the Supreme Court.

Turning now to the decisions before us on this appeal, the district court on remand in Day vacated its injunction setting mandatory time limits. As to alternative forms of relief, Judge Holden stated that "the Supreme Court's disapproval of class-wide deadlines on future disability claims casts a shadow upon the finding of class-wide unreasonable delays in reconsideration determinations and hearings." The district judge denied any class-wide relief and dismissed the action. Citing footnote 33 of the Court's opinion in Heckler v. Day, he indicated that plaintiffs should proceed individually. Several days later, Judge Holden also granted the Secretary's motion to vacate the judgment and dismiss the class action in Barnett. He found plaintiffs' attempts to distinguish Barnett from Day unpersuasive and, accordingly, declined to fashion alternative class-wide relief. These appeals followed.

II.

The principal issue on appeal is the extent to which the Supreme Court's opinion in heckler v. Day precludes class-wide relief in these cases, either explicitly or by implication. Appellants characterize that opinion as deciding only the narrow issue of the validity of mandatory time limits in the administrative review process. They maintain that the Court did not disturb the district court's determination that section 405(b) requires reasonably prompt hearings and reconsiderations and that the delays suffered by plaintiffs in this case were unreasonable. Accordingly, they argue that Heckler v. Day doe not foreclose class-wide relief other than time limits and that, by failing to grant alternative declaratory and injunctive relief to the classes, the district court misinterpreted the Court's mandate on remand. Appellants contend that the Court's opinion is not based on principles of deference to the Secretary's administrative discretion, and that such discretion, in any event, does not preclude other forms of class-wide relief. They propose various alternative remedies, including notice to individual claimants informing them of their rights and reporting requirements.

Appellee Secretary, on the other hand, maintains that Heckler v. Day requires that all actions alleging delay in the adjudication of Title II and Title XVI benefits proceed on an individual basis. Appellee reads the opinion with particular emphasis on footnote 33, to indicate that invalidation of mandatory deadlines bars all class-wide relief in these cases, since class-wide relief cannot take into account differences in facts and circumstances in individual cases. The Secretary also claims that the alternative forms of class-wide relief proposed by appellants rely on the prohibited time limits to define the class and its rights. Appellee argues that the only way to give form and content to the reasonableness requirement on a class-wide basis is through the use of mandatory time limits. Finally, the Secretary contends that, like time limits, the alternative remedies proposed by appellants would jeopardize the quality and uniformity of agency decisions.

We agree with appellants' view of Heckler v. Day. That opinion does not foreclose all class-wide relief designed to minimize unreasonable delays i process in Title II and Title XVI claims. It nowhere addressed the validity of class-wide relief other than mandatory deadlines. In fact, the Court narrowly framed the issue to be decided, indicating that it granted certiorari "to consider whether it is appropriate for a federal court, without statutory authorization, to prescribe deadlines for agency adjudication of Title II disability claims and to order payment of interim benefits in the event of noncompliance." 467 U.S. at 110. See also id. at 105 ("The question presented is the validity of an injunction... that requires the Secretary ...to adjudicate all future disputed disability claims...according to judicially established deadlines"). The Court stated that the Secretary did not challenge the district court's determination that hearings must be held in a reasonable time or that the delays encountered by plaintiffs violated that requirement.*fn4 Id. at 111 & n.15. As Justice Marshall commented in dissent, "the District Court's declaratory judgment that the plaintiff class is entitled to relief is not at issue." Id. at 120. See also id. at 121 (Marshall, J., dissenting) (the court's review was limited to equitable remedy imposed by the district court); Martinez v. Califano, No. 73 C 900 (EHN), slip op. at 4-5 (E.D.N.Y. May 28, 1985) (because the district court's declaratory judgment was undisturbed by the Supreme Court, other class-wide relief was allowed). Contrary to the Secretary's argument, footnote 33 is not a categorical rejection of class-wide relief. The footnote merely makes clear that injunctive relief would still be an appropriate remedy for individual cases ...


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