[Federal Register Volume 63, Number 87 (Wednesday, May 6, 1998)]
[Rules and Regulations]
[Pages 24927-24934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11945]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404 and 416
RIN 0960-AE74


Federal Old-Age, Survivors, and Disability Insurance Benefits; 
Supplemental Security Income for the Aged, Blind, and Disabled; 
Organization and Procedures; Application of Circuit Court Law

AGENCY: Social Security Administration (SSA).

ACTION: Final rules.

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SUMMARY: These final regulations revise the current regulations 
governing how we apply holdings of the United States Courts of Appeals 
(circuit courts) that we determine conflict with our interpretation of 
the Social Security Act or regulations in adjudicating claims under 
title II and title XVI of the Social Security Act (the Act). The 
regulations explain the new goal we have adopted to ensure that 
Acquiescence Rulings (ARs) are developed and issued promptly and the 
new procedures we are implementing to identify claims pending in the 
administrative review process that might be affected by ARs.

EFFECTIVE DATES: These amendments are effective June 5, 1998.

FOR FURTHER INFORMATION CONTACT: Gary Sargent, Litigation Staff, Social 
Security Administration, 6401 Security Boulevard, Baltimore, MD 21235, 
(410) 965-1695 for information about these rules. For information on 
eligibility or claiming benefits, call our national toll free number, 
1-800-772-1213.

SUPPLEMENTARY INFORMATION: On January 11, 1990, (55 FR 1012) we 
published final regulations, set out at 20 CFR 404.985 and 416.1485, to 
implement a revised policy explaining how we apply circuit court 
holdings that we determine conflict with our interpretation of the Act 
or regulations to subsequent claims within that circuit involving the 
same issue. Under those regulations, we prepare ARs which explain the 
circuit court holdings and provide instructions to adjudicators, at all 
levels of the administrative review process, on how to apply the 
circuit court's holding to subsequent claims within the circuit 
involving the same issue. Those regulations reflected the agency's 
decision in 1985 to abandon its prior policy of applying circuit court 
holdings that we determined conflicted with our interpretation of the 
Act or regulations only to the named party or parties to the decision, 
rather than to other cases pending in the administrative review process 
involving the same issue or issues.
    On July 2, 1996, we issued Social Security Ruling (SSR) 96-1p (61 
FR 34470) clarifying and reaffirming the rules established in the 1990 
regulations. Since that time, we have reviewed our rules and our 
implementing procedures to determine what changes could be instituted 
to further improve the acquiescence process. Based upon that review, on 
September 18, 1997, we published at 62 FR 48963, proposed revisions to 
the acquiescence regulations, which we are now publishing as final 
rules.
    The proposed rules provided the addition of new paragraphs 
404.985(b)(1) and 416.1485(b)(1) to establish a general goal for 
issuing ARs no later than 120 days from the date of our receipt of a 
precedential circuit court decision. The proposed rules also provided, 
by the addition of new paragraphs 404.985(b)(3) and 416.1485(b)(3), for 
new procedures to identify claims pending within SSA which may be 
affected by an AR that may subsequently be issued. These same sections 
also provided that, once an AR is issued, we will send notices to those 
individuals whose claims have been identified as potentially being 
affected by the AR informing them of their right to request a 
readjudication, as described in paragraphs 404.985(b)(2) and 
416.1485(b)(2) of the rules.

The Final Rules

The Role of Litigation in the Policymaking Process

    Our review indicated that it is important to reaffirm the principle 
that our goal in administering our programs is to have uniform, 
national program standards. Our procedures, which provide for 
acquiescence within the circuit when a circuit court issues a 
precedential decision containing a holding that we determine conflicts 
with our interpretation of the Act or regulations, result in differing 
rules in different sections of the country. This situation is not 
desirable and ordinarily should not, if possible, continue 
indefinitely.
    Therefore, we wish to make it clear that generally ARs are 
temporary measures. When we receive a precedential circuit court 
decision containing a holding that we determine conflicts with our 
interpretation of the Act or regulations, we consider whether the rules 
at issue should be changed on a nationwide basis to conform to the 
court's holding. If we continue to believe that our interpretation of 
the statute or regulations at issue is correct and we seek further 
judicial review of the circuit court's decision, we will stay further 
development of the AR until the judicial review process runs its 
course. If our assessment shows that we should change our rules and 
adopt a circuit court's holding nationwide, we will, at the time we 
publish the AR, have determined the steps necessary to do so. This may 
require changing our regulations or rulings; it may also require 
seeking a clarifying legislative change to the Act. We would then 
proceed to issue an AR because changing our nationwide rules through 
legislation or rulemaking may require a significant period of time.
    Similarly, if our assessment shows that our rules represent a 
reasonable interpretation of the Act or regulations, but we are unable 
to resolve the matter by seeking further judicial review, we will issue 
an AR and at the time we publish the AR have determined the appropriate 
steps to attempt to address the issue which was the subject of the 
circuit court's holding. This may mean issuing clarifying regulations 
or seeking legislation. There are certain instances when an issue 
cannot be resolved, such as a constitutional issue which the Supreme 
Court chooses not to review or legislation is required but not enacted 
and, therefore, an AR may remain in effect.
    Although our goal to have uniform national standards is implicit in 
the current regulations, we are including in this preamble an explicit 
statement of our commitment to maintaining a uniform nationwide system 
of rules. In addition to making minor editorial corrections to the 
current regulations, these rules amend the regulations in two 
substantive areas, as follow:

Establishing a Timeliness Goal for Issuing ARs

    A common criticism regarding the acquiescence process has involved 
the length of time it has taken for us to prepare and issue an AR. As a 
result, we have reassessed our procedures and have decided to place in 
our regulations our goal to release an AR for publication in the 
Federal Register no later than 120 days from the time we receive a 
precedential circuit court decision for which the AR is being issued, 
unless further judicial review of that decision is pending. This 
timeframe will also not apply when publication of an AR requires such 
coordination with the Department of Justice and/or other Federal 
agencies that it becomes no longer feasible. We are adding new

[[Page 24928]]

paragraphs 404.985(b)(1) and 416.1485(b)(1) so that the public is fully 
informed of this new timeframe.

Identifying Pending Claims Which May Be Affected by an AR

    When we published the 1990 acquiescence regulations, we noted that 
a number of commenters on the 1988 proposed regulations (53 FR 46628 
(November 18, 1988)) urged that we take action to identify and list 
pending claims that might be affected by an AR. In the response to that 
comment, we stated at 55 FR at 1013:

    As a matter of operational necessity, some time will always 
elapse between the date of a court decision and the time that we 
could notify all adjudicators to begin listing cases which might be 
affected by its holding. Thus, a substantial number of cases would 
not be listed for later readjudication. The process which these 
comments suggest presumes instantaneous, comprehensive 
identification of all cases, which operationally we cannot 
accomplish. Therefore, despite the fact that requiring claimants to 
seek readjudication does require some action on their part, we have 
concluded that this is the most efficient and effective way to 
proceed and have not adopted these comments in the final 
regulations.

The basic facts noted in that response remain valid. Despite improved 
technology, it is still operationally impossible for us to identify all 
pending claims that might be affected by an AR. However, we have 
reassessed this situation and have now decided that it would be 
appropriate to identify pending claims that might be affected by an AR, 
as expeditiously as possible, even though we may not be able to 
identify all such claims.
    Therefore, as described in paragraphs 404.985(b)(3) and 
416.1485(b)(3), we are implementing the following procedures. As soon 
as possible after we receive a precedential circuit court decision that 
we find may contain a holding that conflicts with our interpretation of 
the Act or regulations, we will develop and provide our adjudicators 
with criteria that they will use to identify pending claims we are 
deciding within the relevant circuit that might be affected, if we 
subsequently determine that an AR is required. If an AR is subsequently 
released, a notice will be sent informing the claimants in these cases 
that might be affected by the AR that an AR has been issued that might 
affect the claim. The notice to the claimant will also explain the 
procedures for obtaining a readjudication of the claim under the AR. If 
we develop criteria and begin identifying claims, but subsequently 
determine that an AR is not required, the notices will not be sent.
    We will notify adjudicators of the appropriate criteria to be used 
to identify claims no later than 10 days after we receive a circuit 
court decision that we determine may contain a holding which conflicts 
with our interpretation of the Act or regulations. Although we believe 
that the new procedure to identify pending claims within the relevant 
circuit that might be affected will greatly reduce the number of 
claimants who would have to learn of the issuance of the AR through the 
Federal Register publication of it or otherwise, the new procedure will 
likely not identify all individuals whose claims may be subject to the 
AR. For this reason, we have retained the readjudication procedure in 
paragraphs 404.985(b)(2) and 416.1485(b)(2) to ensure the protection of 
all claimants. Additionally, if a claimant or an adjudicator brings to 
our attention that a claim could potentially be affected by a circuit 
court decision that might become the subject of an AR, we will, if 
appropriate, identify that case pending a decision as to whether an AR 
is necessary in the circuit court decision in question.
    These regulations do not apply to current and reopened claims 
governed by the court-approved settlement in Stieberger v. Sullivan, 
801 F. Supp. 1079 (S.D. N.Y. 1992), to the extent that the regulations 
are inconsistent with the settlement.

Public Comments

    These regulatory provisions were published in the Federal Register 
as a notice of proposed rulemaking (NPRM) on September 18, 1997 (62 FR 
48963). We provided the public a 60-day comment period. We received a 
total of five statements containing multiple comments in response to 
this NPRM, two from individuals who are attorney representatives of 
claimants and three from legal services organizations.
    Comment: One commenter recommended that the 120-day timeframe for 
publishing an AR specified in the NPRM be reduced to coincide with the 
date of the issuance of the circuit court's mandate under Rule 41 of 
the Federal Rules of Appellate Procedure. The commenter stated that 
this would allow SSA at least 52 days to prepare and release an AR. 
Another commenter stated that an AR should be effective as of the date 
of the order of the circuit court for which the AR is being issued.
    Response: We have not adopted these comments. By necessity, some 
time will always elapse between the date of a court decision and the 
date that we publish an AR for that decision, due to the practical 
impossibility of immediately taking all the steps necessary for 
implementing a circuit court decision. Because, as we note below, 
interpreting and applying a circuit court's holding may not be a simple 
matter, we have decided that 120 days from the date we receive the 
court's decision is the appropriate timeframe for us to thoroughly 
analyze the decision, determine that it contains a holding conflicting 
with our interpretation of the Act or regulations, and develop an AR to 
provide as specific a statement as possible explaining SSA's 
interpretation of the holding and how SSA will apply the holding when 
adjudicating claims within the applicable circuit. Therefore, ARs will 
generally continue to be effective as of the date of publication, and 
the readjudication procedures will continue to be available with 
respect to claims decided between the date of the court decision and 
publication of the AR. The new provision in the regulation for 
identifying pending claims potentially affected by the court's holding 
will further protect the rights of claimants whose claims are 
adjudicated during the period prior to the effective date of the AR. We 
relied on similar reasoning in not adopting a comment on the 1990 
acquiescence regulations, 55 FR at 1016, which suggested that ARs 
should be effective as of the date of the circuit court decision.
    Comment: One commenter stated that the regulations establishing the 
process for identifying claims affected by precedential circuit court 
holdings should provide a procedure for ``listing'' affected claims 
(including those decided beyond the 120-day timeframe if publication of 
an AR is delayed) and should provide our adjudicators with instructions 
for readjudicating these claims. The same commenter asked who would be 
responsible for identifying the affected claims and suggested that the 
regulations assign this responsibility to specific SSA personnel.
    Response: The regulations establish a new process for identifying 
pending claims that may be affected by publication of an AR. We will 
begin to list identified claims no later than 10 days after the date 
the precedential circuit court decision is received by SSA. 
Identification criteria and instructions will be issued to all of our 
adjudicators in the circuit who will be responsible for deciding, in 
accordance with those criteria and instructions, whether a particular 
claim may be affected by the court's holding. We believe that 
adjudicators are best suited to identify these claims because ARs apply 
to all levels of adjudication, not

[[Page 24929]]

only to the ALJ and Appeals Council levels, unless a court holding by 
its nature applies to only certain levels of adjudication. If 
publication of an AR is delayed beyond the 120-day timeframe, the 
identification process will continue until the AR is issued. After an 
AR is published, additional instructions for each AR will be issued to 
all adjudicators in the circuit as needed.
    Comment: One commenter stated that paragraph 404.985(b)(3) of the 
regulations should explicitly reflect the timeframe which was contained 
in the preamble to the NPRM that, within 10 days after SSA receives a 
circuit court decision for which it determines an AR may be required, 
SSA will provide instructions to adjudicators on the criteria for 
identifying pending claims that might be subject to readjudication if 
an AR is subsequently published for that court decision.
    Response: Ordinarily we do not include operational processing time 
goals in regulations. However, because of our commitment to the timely 
publication of ARs, we have provided in these regulations that, in 
general, an AR will be released for publication in the Federal Register 
no later than 120 days from receipt of the court's decision. We believe 
the operational steps necessary for identifying pending claims are 
appropriately placed in the various detailed instructions that will be 
issued to adjudicators. Since the specific elements of the 
identification process are an operational matter, we have not placed it 
within the regulations. When we issue implementing instructions, they 
will contain the operational details necessary for us to inform 
adjudicators and others in the claims process of the appropriate 
criteria to be used to identify claims no later than 10 days after we 
receive a circuit court decision that we determine may contain a 
holding which conflicts with our interpretation of the Act or 
regulations.
    Comment: One individual suggested that any process that does not 
provide for notice to all claimants, including claimants who received 
determinations between the date of the circuit court decision and the 
date we start identifying claimants who could potentially be affected 
by an AR (generally 10 days after our receipt of the circuit court 
decision), is ``wholly inadequate.''
    Response: As we pointed out in the NPRM, we recognize that the new 
procedure may not identify all individuals who could be affected by an 
AR. Consequently, we have retained the readjudication procedures in 
paragraphs 404.985(b)(2) and 416.1485(b)(2) to ensure the protection of 
all claimants. We expect that, generally, very few claims that could 
potentially be affected by an AR will be adjudicated during the 
relatively short period before we begin to identify claimants. However, 
claimants can bring to our attention and adjudicators can identify such 
claims during this period. While the procedures contained in our 
regulations require some action on the claimant's part, we have 
concluded that, from an operational standpoint, we cannot always 
accomplish instantaneous, comprehensive identification of all claims. 
We believe the new procedure represents the best balance we can strike 
between service to claimants and operational limitations.
    Comment: Two commenters suggested that we publish our decision not 
to issue an AR for a circuit court holding that we determine does not 
conflict with our interpretation of the Act or regulations. One of 
these commenters also suggested that we should publish a notice in the 
Federal Register whenever we are unable to meet the 120-day timeframe 
for publishing an AR.
    Response: We have not adopted these comments. We review 
approximately 600 circuit court decisions each year to determine 
whether an AR is required. We believe that publishing notices in the 
Federal Register for each of these decisions is an inefficient and 
costly way to inform the public and the courts about our conclusions 
with respect to acquiescence. We also do not believe it would be 
efficient to require SSA to publish a notice whenever issuance of an AR 
is delayed beyond the 120-day timeframe. We believe that we will 
provide the highest quality service to the public by focusing our 
limited resources on publishing ARs within the 120-day timeframe 
specified in these regulations and on notifying individual claimants 
identified under the procedure in paragraphs 404.985(b)(3) and 
416.1485(b)(3) about circuit court decisions that may affect their 
claims.
    Comment: One commenter suggested that the regulations should not 
limit readjudications under an AR to the particular issue addressed by 
the AR but instead should allow de novo review of the entire claim.
    Response: Claims pending administrative review will receive de novo 
review when adjudicated under an AR. Under the 1990 acquiescence 
regulations, which we have not changed in this regard, other claims in 
which administrative appeal rights have lapsed are readjudicated based 
upon a consideration of the issues covered by the AR. To the extent 
that those issues covered by the AR affect other issues in the claim, 
those other issues will also be addressed as part of the 
readjudication. However, we do not believe that the Act requires us to 
automatically afford lapsed claims being readjudicated the opportunity 
for de novo review.
    Comment: One commenter suggested that the regulations should permit 
full appeal rights as to a finding that a claim is not subject to 
readjudication under an AR.
    Response: This question was addressed in the preamble to the 1990 
acquiescence regulations, 55 FR at 1014. We do not believe that 
permitting further review on the question of whether or not an AR 
applies to a pending claim is appropriate. Once we conclude that 
readjudication is not necessary, the next step should be an appeal on 
the substantive merits of the claim itself, not the readjudication 
question. When a decision is reached on appeal concerning the 
substantive issue(s), the readjudication issue will be resolved. In 
cases where a person did not appeal timely and subsequently becomes 
aware of an AR that may apply to his or her claim, the readjudication 
procedure is available. Also, claimants may request to have their 
lapsed claims reopened and we may do so if the grounds for reopening 
are met.
    We continue to believe that the combination of appeal, 
readjudication, and reopening provides a fair process that protects the 
rights of claimants.
    Comment: One commenter expressed the view that paragraph 
404.985(b)(2) should not require claimants to identify the appropriate 
AR when seeking readjudication. The commenter suggests that a claimant 
should be allowed to seek readjudication by identifying the appropriate 
circuit court decision, without also identifying the AR.
    Response: We have adopted this comment and modified the new 
paragraphs under 404.985(b)(2) and 416.1485(b)(2) to specify that the 
claimant may request application of the AR to his or her case by either 
citing the AR or, in the alternative, by specifying the holding or 
portion of a circuit court decision which could change the prior 
determination in their case. It should be noted, however, that the 1990 
regulations provided under paragraphs 404.985(b) and 416.1485(b) that 
one way a claimant may obtain a readjudication was by submitting a 
statement which cited the AR; the regulations did not state that this 
was, and we did not intend this to be, an absolute requirement for 
obtaining readjudication.
    Regulation paragraphs 404.985(b)(3) and 416.1485(b)(3) provide for 
the identification by SSA of pending claims which might be affected by 
the issuance

[[Page 24930]]

of an AR. When an AR is published, we will send individual notices for 
those claims. In addition, as stated in the preamble to the NPRM, a 
claimant or an adjudicator may bring to our attention a claim that 
could be potentially affected by a circuit court decision and we will, 
if appropriate, identify that claim pending our decision as to whether 
an AR is necessary for the circuit court decision in question.
    Comment: One individual observed that the regulations result in the 
application of differing rules in different sections of the country, 
which is not desirable, and the regulations can cause the differing 
rules to continue indefinitely without restoring national uniformity. 
The commenter suggested that we establish a formal process to oversee 
litigation and to make changes in national rules whenever a district or 
circuit court decision conflicted with our rules.
    Response: As discussed in the preamble to the 1990 acquiescence 
regulations, 55 FR at 1012-1013, a number of studies on the subject of 
Federal acquiescence have noted that nationwide adoption of the 
decision of the first circuit court to address an issue (intercircuit 
acquiescence) would preclude other circuit courts from considering the 
issue. In 1984, when Congress considered legislation that would have 
required SSA to acquiesce in circuit court decisions, the Solicitor 
General of the United States expressed similar concerns, stating that 
the practical effect of that legislation would be to require the 
Department of Justice to consider seeking Supreme Court review of the 
first adverse decision on an issue by any court of appeals. The 
Department of Justice reiterated these concerns in 1997 when Congress 
was again considering legislation to address the issue of acquiescence 
by Federal agencies.
    An approach that would require nationwide adoption of the first 
circuit court decision on a particular issue would not improve SSA's 
adjudicatory and policy making processes, but would instead result in 
the first circuit that happened to rule on an issue setting SSA's 
national rules on that subject. In effect, the circuit court that would 
rule first would rule last. This result could hardly be intended by any 
reasonable interpretation of acquiescence and would undermine the 
advantages, which have been recognized by the Supreme Court, of having 
issues considered by more than one circuit court.
    Moreover, we acquiesce only in the holdings of Federal circuit 
courts and not in holdings of Federal district courts within a circuit. 
See SSR 96-1p (61 FR 34470). This is consistent with the well-
recognized principle that one district court's decision does not 
constitute binding precedent applicable to other claims arising within 
that district. There is no such thing as the ``law of the district.'' 
Indeed, even within the same district, one judge may disagree with the 
holding in a decision by another judge. Thus, despite a district court 
holding in a decision that may conflict with our interpretation of the 
Act or regulations, we will continue to apply our nationwide rules when 
adjudicating claims within that district court's jurisdiction unless 
the court directs otherwise such as may occur in a class action.
    Comment: Several commenters expressed the opinion that we have not 
fully implemented our existing acquiescence policy because, in 
reviewing circuit court holdings to determine whether they conflict 
with our rules, we read the holdings too narrowly and, thus, 
incorrectly decide that an AR is not necessary. The commenters 
suggested that this was caused by a lack of specific standards for 
determining when a circuit court holding conflicts with our rules. One 
commenter said that it was inappropriate for us to interpret circuit 
court holdings and that we should be limited to merely implementing the 
``policy directive'' stated by the court.
    Response: We review every circuit court decision to determine 
whether a circuit court's holding conflicts with our interpretation of 
the Act or regulations. Since our acquiescence policy became effective 
in 1985, we have published 68 ARs. There has been a dramatic decline in 
litigation based on allegations that we have refused to acquiesce in 
specific circuit court decisions since the adoption of the 1990 
acquiescence regulations.
    As discussed in the preamble to the 1990 acquiescence regulations, 
55 FR at 1012, the vast majority of adverse circuit court decisions do 
not conflict with our interpretation of the Act and regulations; they 
are based either on the issue of whether substantial evidence supports 
SSA's final administrative decision or on the issue of whether the 
final administrative decision adheres to established agency rules. A 
court holding based on the adjudicator's failure to follow established 
rules does not conflict with the rules themselves. Identifying the 
holding of a particular circuit court decision and determining whether 
or not the holding conflicts with our interpretation of the Act and 
regulations are not always clear or simple matters, and this may 
account for the concern expressed by these commenters about how we 
implement acquiescence policy.
    Establishing specific standards for evaluating whether a court 
holding conflicts with our interpretation of the Act and regulations 
would be impractical because of the diversity and complexities both of 
the programs and policies we administer and of the court decisions 
concerning these programs and policies. For example, the policies and 
issues considered in adjudicating disability claims usually involve 
technical medical and vocational concepts, which are very different 
from the benefit computation and family relationship questions 
frequently considered in retirement and survivors claims. Because 
explaining how we will apply the circuit court holding within the 
circuit is also not a clear and simple matter, we do not believe that a 
standard for analyzing all circuit court holdings would be feasible. 
Consequently, we have declined to adopt this comment.
    By statute, establishing rules and procedures governing SSA's 
programs is the responsibility of the Commissioner of Social Security. 
Furthermore, court decisions generally resolve individual claims and 
neither address similar circumstances, nor are written in a way that 
necessarily instructs our adjudicators how to apply the courts' 
holdings to other claims. We believe that to ensure uniform and 
consistent adjudication procedures necessary for the administration of 
a national program, SSA must analyze and interpret circuit court 
holdings that we determine conflict with SSA's nationwide rules to 
provide our adjudicators as specific a statement as possible of how to 
apply the holding in the course of adjudicating other claims.
    If a person believes that we have overlooked or misconstrued a 
holding in a court of appeals decision, that person may bring this 
matter to our attention and we will respond appropriately.
    Comment: Two commenters suggested that SSA should amend the current 
acquiescence regulations to direct adjudicators to follow circuit court 
precedent whether or not an AR has been issued. It was also suggested 
that SSR 96-1p, which sets forth a different policy from that suggested 
by the commenters, be withdrawn immediately.
    Response: Both the preamble to the 1990 acquiescence regulations, 
55 FR at 1013, and SSR 96-1p, published on July 2, 1996, explain the 
basis for our longstanding policy that SSA adjudicators are to follow 
SSA's nationwide rules until the

[[Page 24931]]

Commissioner determines that a circuit court holding is in conflict 
with our national rules and publishes an AR instructing adjudicators on 
how the decision is to be followed within the applicable circuit. 
Circuit court decisions generally resolve individual claims and are not 
necessarily written in a way that instructs our adjudicators on how to 
consistently apply the courts' holdings to other claims, particularly 
when the numerous possible situations to which they may apply are 
considered. The meaning and scope of a court holding are not always 
clear and can be subject to disparate interpretations.
    If each of SSA's over 15,000 adjudicators were permitted to apply 
his or her own interpretation of a circuit court decision in resolving 
these difficult questions, rather than relying on guidance from the 
Commissioner in the form of an AR, it could result in conflicting 
standards being used by decisionmakers, even within the same circuit. 
Furthermore, the Commissioner has the responsibility by statute to 
administer the Social Security programs and establish the agency's 
rules and procedures. If the Commissioner abdicated that responsibility 
by allowing individual adjudicators to decide claims according to his 
or her individual interpretation of the law, it would be impossible for 
the Commissioner to carry out his responsibility to administer the 
Social Security programs in an effective and efficient manner on a 
nationwide basis, and to ensure consistent and uniform application of 
SSA's rules. Indeed, some adjudicators might apply the circuit court's 
decision in ways less favorable to claimants than the court intended. 
Furthermore, it would not necessarily be apparent what standard was 
applied by an individual adjudicator; therefore, unlike the standards 
established by the Commissioner in an AR, the interpretation of a 
circuit court decision by an individual adjudicator might not be 
readily susceptible to judicial scrutiny.
    In addition, adjudicators at the initial and reconsideration levels 
of review generally do not have any legal training in interpreting and 
applying circuit court decisions. If authority to apply circuit court 
decisions in the absence of an AR was extended only to ALJs and the 
Appeals Council, it would further undermine uniformity in 
decisionmaking by creating different standards of adjudication at 
different levels of administrative review.
    For all these reasons, we continue to believe that the AR is the 
fairest and most effective method to achieve uniform acquiescence in 
circuit court holdings that conflict with SSA's nationwide rules. This 
approach is consistent with the longstanding legal principle that it is 
the responsibility of the Commissioner, not individual adjudicators, to 
establish SSA's rules and policies (including how to apply a circuit 
court holding which conflicts with SSA's nationwide rules). Any erosion 
of this legal principle would represent a radical change in the Federal 
administrative structure, and would undermine a Federal department or 
agency head's accountability for the administration of the agency's 
programs. Therefore, it is the role and responsibility of individual 
adjudicators to decide claims by applying the rules and policies 
established by the Commissioner to the facts of an individual case.
    Comment: One individual suggested that we clarify our longstanding 
regulatory language setting forth SSA's authority to rescind an AR when 
we subsequently publish a new regulation addressing an issue not 
previously included in our regulations.
    Response: This provision has been in the regulations since 1990 and 
courts have not found that it has been misapplied. We do not believe 
there is a need for a clarifying amendment to this particular provision 
at this time.
    Comment: One commenter questioned the legality of relitigating in 
the same circuit an issue addressed by an AR. Another questioned 
whether the regulations permit SSA to relitigate an issue within the 
same circuit after publication of an AR if we later publish a 
nationwide regulation reaffirming our original position on the issue.
    Response: These final rules make no changes in our relitigation 
policies and procedures which were set forth in the 1990 acquiescence 
regulations. We do not believe that a Federal agency is legally 
precluded from relitigating an issue within a circuit that has 
previously issued a ruling adverse to the Government's position. When 
we published the 1990 acquiescence regulations, we discussed some of 
the authorities supporting our position on relitigation and stated that 
we would not use relitigation as a primary means for resolving 
conflicts in statutory and regulatory interpretation. To date, we have 
never used the relitigation procedures outlined in the 1990 
regulations. Those regulations state that if we do decide to relitigate 
an issue, we will publish a notice of our intention in the Federal 
Register and also provide a notice explaining our action to all 
affected claimants.
    As discussed in the preamble to the 1990 acquiescence regulations, 
55 FR at 1015, when we determine that a circuit court holding conflicts 
with our interpretation of the Act and regulations, we generally expect 
to resolve the conflict by actively pursuing our right to seek further 
judicial review, revisiting the same issue in related litigation, 
clarifying our regulations, or seeking statutory amendments. The 
regulations outline a process for relitigating a court's holding within 
the same circuit after publication of an AR, which requires certain 
specific activating events. Publication of a regulation, by itself, is 
not an activating event for relitigation.
    Based on our analysis of the comments, and for the reasons set 
forth above, we are publishing the proposed rules as final rules with 
the changes to paragraphs 404.985(b)(2) and 416.1485(b)(2) discussed 
above. We have also made minor editorial and technical changes for 
clarification and consistency.

Regulatory Procedures

Executive Order 12866

    We have consulted with the Office of Management and Budget (OMB) 
and determined that these rules do not meet the criteria for a 
significant regulatory action under Executive Order 12866. Thus, they 
are not subject to OMB review.

Regulatory Flexibility Act

    We certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because these 
rules affect only individuals. Therefore, a regulatory flexibility 
analysis as provided in the Regulatory Flexibility Act, as amended, is 
not required.

Paperwork Reduction Act

    These regulations contain information collection requirements in 
paragraphs 404.985(b) and 416.1485(b). We have received approval for 
these requirements from OMB under OMB No. 0960-0581 which expires 
November 30, 2000.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security-Disability Insurance; 96.002, Social Security-Retirement 
Insurance; 96.003, Social Security-Special Benefits for Persons Aged 
72 and Over; 96.004, Social Security-Survivors Insurance; 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Death benefits, Disability

[[Page 24932]]

benefits, Old-Age, Survivors and Disability insurance, Reporting and 
recordkeeping requirements, Social security.

20 CFR Part 416

    Administrative practice and procedure, Aged, Blind, Disability 
benefits, Public assistance programs, Reporting and recordkeeping 
requirements Supplemental Security Income (SSI).

    Dated: April 27, 1998.
Kenneth S. Apfel,
Commissioner of Social Security.

    For the reasons set out in the preamble, subpart J of part 404 and 
subpart N of part 416 of chapter III of title 20 of the Code of Federal 
Regulations are amended as set forth below:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950-)

    20 CFR part 404, subpart J, is amended as follows:
    1. The authority citation for subpart J of part 404 continues to 
read as follows:

    Authority: Secs. 201(j), 205(a), (b), (d)-(h), and (j), 221, 
225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 
405(a), (b), (d)-(h), and (j), 421, 425, and 902(a)(5)); 31 U.S.C. 
3720A; sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); 
secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 
421 note).

    2. Section 404.985 is revised to read as follows:


Sec. 404.985  Application of circuit court law.

    The procedures which follow apply to administrative determinations 
or decisions on claims involving the application of circuit court law.
    (a) General. We will apply a holding in a United States Court of 
Appeals decision that we determine conflicts with our interpretation of 
a provision of the Social Security Act or regulations unless the 
Government seeks further judicial review of that decision or we 
relitigate the issue presented in the decision in accordance with 
paragraphs (c) and (d) of this section. We will apply the holding to 
claims at all levels of the administrative review process within the 
applicable circuit unless the holding, by its nature, applies only at 
certain levels of adjudication.
    (b) Issuance of an Acquiescence Ruling. When we determine that a 
United States Court of Appeals holding conflicts with our 
interpretation of a provision of the Social Security Act or regulations 
and the Government does not seek further judicial review or is 
unsuccessful on further review, we will issue a Social Security 
Acquiescence Ruling. The Acquiescence Ruling will describe the 
administrative case and the court decision, identify the issue(s) 
involved, and explain how we will apply the holding, including, as 
necessary, how the holding relates to other decisions within the 
applicable circuit. These Acquiescence Rulings will generally be 
effective on the date of their publication in the Federal Register and 
will apply to all determinations and decisions made on or after that 
date unless an Acquiescence Ruling is rescinded as stated in paragraph 
(e) of this section. The process we will use when issuing an 
Acquiescence Ruling follows:
    (1) We will release an Acquiescence Ruling for publication in the 
Federal Register for any precedential circuit court decision that we 
determine contains a holding that conflicts with our interpretation of 
a provision of the Social Security Act or regulations no later than 120 
days from the receipt of the court's decision. This timeframe will not 
apply when we decide to seek further judicial review of the circuit 
court decision or when coordination with the Department of Justice and/
or other Federal agencies makes this timeframe no longer feasible.
    (2) If we make a determination or decision on your claim between 
the date of a circuit court decision and the date we publish an 
Acquiescence Ruling, you may request application of the published 
Acquiescence Ruling to the prior determination or decision. You must 
demonstrate that application of the Acquiescence Ruling could change 
the prior determination or decision in your case. You may demonstrate 
this by submitting a statement that cites the Acquiescence Ruling or 
the holding or portion of a circuit court decision which could change 
the prior determination or decision in your case. If you can so 
demonstrate, we will readjudicate the claim in accordance with the 
Acquiescence Ruling at the level at which it was last adjudicated. Any 
readjudication will be limited to consideration of the issue(s) covered 
by the Acquiescence Ruling and any new determination or decision on 
readjudication will be subject to administrative and judicial review in 
accordance with this subpart. Our denial of a request for 
readjudication will not be subject to further administrative or 
judicial review. If you file a request for readjudication within the 
60-day appeal period and we deny that request, we shall extend the time 
to file an appeal on the merits of the claim to 60 days after the date 
that we deny the request for readjudication.
    (3) After we receive a precedential circuit court decision and 
determine that an Acquiescence Ruling may be required, we will begin to 
identify those claims that are pending before us within the circuit and 
that might be subject to readjudication if an Acquiescence Ruling is 
subsequently issued. When an Acquiescence Ruling is published, we will 
send a notice to those individuals whose cases we have identified which 
may be affected by the Acquiescence Ruling. The notice will provide 
information about the Acquiescence Ruling and the right to request 
readjudication under that Acquiescence Ruling, as described in 
paragraph (b)(2) of this section. It is not necessary for an individual 
to receive a notice in order to request application of an Acquiescence 
Ruling to his or her claim, as described in paragraph (b)(2) of this 
section.
    (c) Relitigation of court's holding after publication of an 
Acquiescence Ruling. After we have published an Acquiescence Ruling to 
reflect a holding of a United States Court of Appeals on an issue, we 
may decide under certain conditions to relitigate that issue within the 
same circuit. We may relitigate only when the conditions specified in 
paragraphs (c)(2) and (3) of this section are met, and, in general, one 
of the events specified in paragraph (c)(1) of this section occurs.
    (1) Activating events:
    (i) An action by both Houses of Congress indicates that a circuit 
court decision on which an Acquiescence Ruling was based was decided 
inconsistently with congressional intent, such as may be expressed in a 
joint resolution, an appropriations restriction, or enactment of 
legislation which affects a closely analogous body of law;
    (ii) A statement in a majority opinion of the same circuit 
indicates that the court might no longer follow its previous decision 
if a particular issue were presented again;
    (iii) Subsequent circuit court precedent in other circuits supports 
our interpretation of the Social Security Act or regulations on the 
issue(s) in question; or
    (iv) A subsequent Supreme Court decision presents a reasonable 
legal basis for questioning a circuit court holding upon which we base 
an Acquiescence Ruling.
    (2) The General Counsel of the Social Security Administration, 
after consulting with the Department of Justice, concurs that 
relitigation of an issue and application of our interpretation of the 
Social Security Act or regulations to selected claims in the

[[Page 24933]]

administrative review process within the circuit would be appropriate.
    (3) We publish a notice in the Federal Register that we intend to 
relitigate an Acquiescence Ruling issue and that we will apply our 
interpretation of the Social Security Act or regulations within the 
circuit to claims in the administrative review process selected for 
relitigation. The notice will explain why we made this decision.
    (d) Notice of relitigation. When we decide to relitigate an issue, 
we will provide a notice explaining our action to all affected 
claimants. In adjudicating claims subject to relitigation, 
decisionmakers throughout the SSA administrative review process will 
apply our interpretation of the Social Security Act and regulations, 
but will also state in written determinations or decisions how the 
claims would have been decided under the circuit standard. Claims not 
subject to relitigation will continue to be decided under the 
Acquiescence Ruling in accordance with the circuit standard. So that 
affected claimants can be readily identified and any subsequent 
decision of the circuit court or the Supreme Court can be implemented 
quickly and efficiently, we will maintain a listing of all claimants 
who receive this notice and will provide them with the relief ordered 
by the court.
    (e) Rescission of an Acquiescence Ruling. We will rescind as 
obsolete an Acquiescence Ruling and apply our interpretation of the 
Social Security Act or regulations by publishing a notice in the 
Federal Register when any of the following events occurs:
    (1) The Supreme Court overrules or limits a circuit court holding 
that was the basis of an Acquiescence Ruling;
    (2) A circuit court overrules or limits itself on an issue that was 
the basis of an Acquiescence Ruling;
    (3) A Federal law is enacted that removes the basis for the holding 
in a decision of a circuit court that was the subject of an 
Acquiescence Ruling; or
    (4) We subsequently clarify, modify or revoke the regulation or 
ruling that was the subject of a circuit court holding that we 
determined conflicts with our interpretation of the Social Security Act 
or regulations, or we subsequently publish a new regulation(s) 
addressing an issue(s) not previously included in our regulations when 
that issue(s) was the subject of a circuit court holding that 
conflicted with our interpretation of the Social Security Act or 
regulations and that holding was not compelled by the statute or 
Constitution.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

    20 CFR part 416, subpart N, is amended as follows:
    1. The authority citation for subpart N continues to read as 
follows:

    Authority: Secs. 702(a)(5), 1631, and 1633 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b).

    2. Section 416.1485 is revised to read as follows:


Sec. 416.1485  Application of circuit court law.

    The procedures which follow apply to administrative determinations 
or decisions on claims involving the application of circuit court law.
    (a) General. We will apply a holding in a United States Court of 
Appeals decision that we determine conflicts with our interpretation of 
a provision of the Social Security Act or regulations unless the 
Government seeks further judicial review of that decision or we 
relitigate the issue presented in the decision in accordance with 
paragraphs (c) and (d) of this section. We will apply the holding to 
claims at all levels of the administrative review process within the 
applicable circuit unless the holding, by its nature, applies only at 
certain levels of adjudication.
    (b) Issuance of an Acquiescence Ruling. When we determine that a 
United States Court of Appeals holding conflicts with our 
interpretation of a provision of the Social Security Act or regulations 
and the Government does not seek further judicial review or is 
unsuccessful on further review, we will issue a Social Security 
Acquiescence Ruling. The Acquiescence Ruling will describe the 
administrative case and the court decision, identify the issue(s) 
involved, and explain how we will apply the holding, including, as 
necessary, how the holding relates to other decisions within the 
applicable circuit. These Acquiescence Rulings will generally be 
effective on the date of their publication in the Federal Register and 
will apply to all determinations, redeterminations, and decisions made 
on or after that date unless an Acquiescence Ruling is rescinded as 
stated in paragraph (e) of this section. The process we will use when 
issuing an Acquiescence Ruling follows:
    (1) We will release an Acquiescence Ruling for publication in the 
Federal Register for any precedential circuit court decision that we 
determine contains a holding that conflicts with our interpretation of 
a provision of the Social Security Act or regulations no later than 120 
days from the receipt of the court's decision. This timeframe will not 
apply when we decide to seek further judicial review of the circuit 
court decision or when coordination with the Department of Justice and/
or other Federal agencies makes this timeframe no longer feasible.
    (2) If we make a determination or decision on your claim between 
the date of a circuit court decision and the date we publish an 
Acquiescence Ruling, you may request application of the published 
Acquiescence Ruling to the prior determination or decision. You must 
demonstrate that application of the Acquiescence Ruling could change 
the prior determination or decision in your case. You may demonstrate 
this by submitting a statement that cites the Acquiescence Ruling or 
the holding or portion of a circuit court decision which could change 
the prior determination or decision in your case. If you can so 
demonstrate, we will readjudicate the claim in accordance with the 
Acquiescence Ruling at the level at which it was last adjudicated. Any 
readjudication will be limited to consideration of the issue(s) covered 
by the Acquiescence Ruling and any new determination or decision on 
readjudication will be subject to administrative and judicial review in 
accordance with this subpart. Our denial of a request for 
readjudication will not be subject to further administrative or 
judicial review. If you file a request for readjudication within the 
60-day appeal period and we deny that request, we shall extend the time 
to file an appeal on the merits of the claim to 60 days after the date 
that we deny the request for readjudication.
    (3) After we receive a precedential circuit court decision and 
determine that an Acquiescence Ruling may be required, we will begin to 
identify those claims that are pending before us within the circuit and 
that might be subject to readjudication if an Acquiescence Ruling is 
subsequently issued. When an Acquiescence Ruling is published, we will 
send a notice to those individuals whose cases we have identified which 
may be affected by the Acquiescence Ruling. The notice will provide 
information about the Acquiescence Ruling and the right to request 
readjudication under that Acquiescence Ruling, as described in 
paragraph (b)(2) of this section. It is not necessary for an individual 
to receive a notice in order to request application of an Acquiescence 
Ruling to his or her claim, as described in paragraph (b)(2) of this 
section.
    (c) Relitigation of court's holding after publication of an 
Acquiescence Ruling. After we have published an Acquiescence Ruling to 
reflect a holding

[[Page 24934]]

of a United States Court of Appeals on an issue, we may decide under 
certain conditions to relitigate that issue within the same circuit. We 
may relitigate only when the conditions specified in paragraphs (c)(2) 
and (3) of this section are met, and, in general, one of the events 
specified in paragraph (c)(1) of this section occurs.
    (1) Activating events:
    (i) An action by both Houses of Congress indicates that a circuit 
court decision on which an Acquiescence Ruling was based was decided 
inconsistently with congressional intent, such as may be expressed in a 
joint resolution, an appropriations restriction, or enactment of 
legislation which affects a closely analogous body of law;
    (ii) A statement in a majority opinion of the same circuit 
indicates that the court might no longer follow its previous decision 
if a particular issue were presented again;
    (iii) Subsequent circuit court precedent in other circuits supports 
our interpretation of the Social Security Act or regulations on the 
issue(s) in question; or
    (iv) A subsequent Supreme Court decision presents a reasonable 
legal basis for questioning a circuit court holding upon which we base 
an Acquiescence Ruling.
    (2) The General Counsel of the Social Security Administration, 
after consulting with the Department of Justice, concurs that 
relitigation of an issue and application of our interpretation of the 
Social Security Act or regulations to selected claims in the 
administrative review process within the circuit would be appropriate.
    (3) We publish a notice in the Federal Register that we intend to 
relitigate an Acquiescence Ruling issue and that we will apply our 
interpretation of the Social Security Act or regulations within the 
circuit to claims in the administrative review process selected for 
relitigation. The notice will explain why we made this decision.
    (d) Notice of relitigation. When we decide to relitigate an issue, 
we will provide a notice explaining our action to all affected 
claimants. In adjudicating claims subject to relitigation, 
decisionmakers throughout the SSA administrative review process will 
apply our interpretation of the Social Security Act and regulations, 
but will also state in written determinations or decisions how the 
claims would have been decided under the circuit standard. Claims not 
subject to relitigation will continue to be decided under the 
Acquiescence Ruling in accordance with the circuit standard. So that 
affected claimants can be readily identified and any subsequent 
decision of the circuit court or the Supreme Court can be implemented 
quickly and efficiently, we will maintain a listing of all claimants 
who receive this notice and will provide them with the relief ordered 
by the court.
    (e) Rescission of an Acquiescence Ruling. We will rescind as 
obsolete an Acquiescence Ruling and apply our interpretation of the 
Social Security Act or regulations by publishing a notice in the 
Federal Register when any of the following events occurs:
    (1) The Supreme Court overrules or limits a circuit court holding 
that was the basis of an Acquiescence Ruling;
    (2) A circuit court overrules or limits itself on an issue that was 
the basis of an Acquiescence Ruling;
    (3) A Federal law is enacted that removes the basis for the holding 
in a decision of a circuit court that was the subject of an 
Acquiescence Ruling; or
    (4) We subsequently clarify, modify or revoke the regulation or 
ruling that was the subject of a circuit court holding that we 
determined conflicts with our interpretation of the Social Security Act 
or regulations, or we subsequently publish a new regulation(s) 
addressing an issue(s) not previously included in our regulations when 
that issue(s) was the subject of a circuit court holding that 
conflicted with our interpretation of the Social Security Act or 
regulations and that holding was not compelled by the statute or 
Constitution.

[FR Doc. 98-11945 Filed 5-5-98; 8:45 am]
BILLING CODE 4190-11-P