Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations 24927

[FR Doc. 98–11970 Filed 5–5–98; 8:45 am]

BILLING CODE 3510–12–C

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.

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
24928 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations

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
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations 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
24930 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations

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 wellrecognized 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
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations 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 SecurityDisability Insurance; 96.002, Social SecurityRetirement 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
24932 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations

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:

§ 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
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations 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:

§ 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
24934 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 /Rules and Regulations

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

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

[Docket No. 96N–0119]

21 CFR Part 801

Natural Rubber-Containing Medical

Devices; User Labeling

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule; interpretation.

SUMMARY: The Food and Drug

Administration (FDA) is providing

notice that it does not intend to apply

to combination products currently

regulated under human drug or biologic

labeling provisions its September 30,

1997, final rule requiring certain

labeling statements for all medical

devices that contain or have packaging

that contains natural rubber that

contacts humans. FDA is taking this

action, in part, in response to a citizen

petition and other communications from

industry that the agency has received

since the publication of the final rule.

FDA intends to initiate a proceeding to

propose natural rubber labeling

requirements for drugs and biologics,

including combination products that are

currently regulated under drug and

biologic labeling provisions. Such a

proceeding may include a combination

of rulemaking and guidance and will

offer opportunity for public comment.

EFFECTIVE DATE: September 30, 1998.

FOR FURTHER INFORMATION CONTACT:

Brian L. Pendleton, Center for Drug

Evaluation and Research (HFD–7),

Food and Drug Administration,

5600 Fishers Lane, Rockville, MD

20857, 301–594–5649; or

Robert A. Yetter, Center for Biologics

Evaluation and Research (HFM–10),

Food and Drug Administration,

8800 Rockville Pike, Bethesda, MD

20892, 301–827–0737.

SUPPLEMENTARY INFORMATION: In the

Federal Register of September 30, 1997

(62 FR 51021), FDA published a final

rule to be codified at 21 CFR 801.437

requiring certain labeling statements on

medical devices that contain or have

packaging that contains natural rubber

that contacts humans. The labeling

statements alert users that a product

contains either dry natural rubber or

natural rubber latex, and for products

containing natural rubber latex that the

presence of this material may cause

allergic reactions. The final rule, which

becomes effective September 30, 1998,

was adopted because natural rubber

may cause a significant health risk to

persons who are sensitized to natural

latex proteins.

In response to a comment on the

proposed latex labeling regulation (61

FR 32618, June 24, 1996) about the

applicability of the requirements to

combination products, FDA stated in

the preamble to the final rule that it

intended to require combination

products (i.e., drug/device and biologic/

device combinations) that contain

natural rubber device components to be

labeled in accordance with § 801.437

(62 FR 51021 at 51026). Because the

entities that comprise a combination

product meet more than one

jurisdictional definition, the agency may

apply one or more sets of regulatory

provisions to such products, as

specified in the Intercenter Agreement

Between the Center for Drug Evaluation

and Research and the Center for Devices

and Radiological Health and the

Intercenter Agreement Between the

Center for Biologics Evaluation and

Research and the Center for Devices and