Source: http://ca.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19720224_0040662.SCT.htm/qx
Timestamp: 2016-12-04 22:27:09
Document Index: 787738297

Matched Legal Cases: ['§ 225', '§ 425', '§ 225', '§ 425', '§ 425', '§ 353', '§ 404', '§ 6706', '§ 404', '§ 6706', '§ 404', '§ 404', '§ 6706', '§ 404', '§ 404', '§ 404', '§ 205', '§ 404', '§ 404', '§ 204', '§ 404', '§ 404', '§ 404', '§ 223', '§ 423', '§ 6707']

| RICHARDSON v. WRIGHT ET AL.
RICHARDSON v. WRIGHT ET AL.
decided*fn*: February 24, 1972.
RICHARDSON, SECRETARY OF HEALTH, EDUCATION, AND WELFAREv.WRIGHT ET AL.
[ 405 U.S. Page 208]
We noted probable jurisdiction of these appeals, 404 U.S. 819 (1971), to consider the applicability of Goldberg [ 405 U.S. Page 209]
v. Kelly, 397 U.S. 254 (1970), to the suspension and termination of disability benefit payments pursuant to § 225 of the Social Security Act, 70 Stat. 817, 42 U. S. C. § 425, and implementing regulations of the Department of Health, Education, and Welfare. Shortly before oral argument, we were advised that the Secretary had adopted new regulations, effective December 27, 1971, governing the procedures to be followed by the Social Security Administration in determining whether to suspend or terminate disability benefits. These procedures include the requirement that a recipient of benefits be given notice of a proposed suspension and the reasons therefor, plus an opportunity to submit rebuttal evidence. In light of that development, we believe that the appropriate course is to withhold judicial action pending reprocessing, under the new regulations, of the determinations here in dispute. If that process results in a determination of entitlement to disability benefits, there will be no need to consider the constitutional claim that claimants are entitled to an opportunity to make an oral presentation. In the context of a comprehensive complex administrative program, the administrative process must have a reasonable opportunity to evolve procedures to meet needs as they arise. Accordingly, we vacate the judgment of the District Court for the District of Columbia, 321 F.Supp. 383 (1971), with direction to that court to remand the cause to the Secretary and to retain jurisdiction for such further proceedings, if any, as may be necessary upon completion of the administrative procedure.
While I join MR. JUSTICE BRENNAN who reaches the merits, I add a word about the unwisdom of the policy pursued by the Court. [ 405 U.S. Page 210]
A three-judge district court held § 225 of the Social Security Act, 42 U. S. C. § 425, unconstitutional, insofar as it purported to authorize the Secretary of Health, Education, and Welfare to suspend the payment of social security disability benefits without giving prior notice and "an opportunity to participate" to the disability beneficiary. 321 F.Supp. 383, 386. The court remanded the cause to the Secretary for the formulation of new procedures consistent with its opinion. Judge Matthews, troubled by an implication in the majority's opinion that participation merely by way of written submissions might satisfy the majority's notions of due process, dissented "from so much of the opinion as seems to suggest that the procedural requirements of due process may be satisfied with something less than the 'opportunity' [to participate] specified in [ Goldberg v. Kelly, 397 U.S. 254]." Id., at 388. We noted probable jurisdiction in these cross-appeals to evaluate the opinion below in light of Goldberg. 404 U.S. 819.
"In Goldberg the Supreme Court held that a welfare recipient, in addition to timely and adequate notice detailing the reasons for a proposed termination of benefits, must have 'an effective opportunity to defend by confronting any adverse witnesses and by presenting his own arguments and evidence orally.'" 321 F.Supp., at 387-388. [ 405 U.S. Page 211]
It cannot seriously be argued that the Secretary's "new rules" comport with Goldberg. They may cure the notice defect, but they make no provision whatsoever for the presentation of oral testimony or the confrontation of witnesses.*fn1 We noted probable jurisdiction, I thought, to determine if the difference between "welfare" payments and "disability" payments is sufficient to say that one's Fifth Amendment right to be heard may be satisfied by an opportunity to make written submissions in the latter case, although not in the former.*fn2 We heard oral argument on this basis. Because of the inadequacy of the new rules, in light of Goldberg, the question will remain regardless of the outcome of a remand.
I think it unseemly, needlessly to shuttle any litigant, especially an indigent, back and forth from court to court, hoping that his exhaustion of newly created remedies will somehow or other make his problem disappear and relieve us of an obligation. No concession promising justice to the claimants has been made. The issue of due process [ 405 U.S. Page 212]
I respectfully dissent. The Court justifies today's sua sponte action on the ground that if reprocessing under the Secretary's new regulations "results in a determination of entitlement to disability benefits, there will be no need to consider the constitutional claim that claimants are entitled to an opportunity to make an oral presentation." (Emphasis by the Court.) Avoidance of unnecessary constitutional decisions is certainly a preferred practice when appropriate. But that course is inappropriate, indeed irresponsible, in this instance. We will not avoid the necessity of deciding the important constitutional question presented by claimants even should they prevail upon the Secretary's reconsideration. The question is being pressed all over the country. The Secretary's brief lists no less than seven cases presenting it with respect to disability benefits and 10 cases presenting it with respect to non-disability benefits.*fn1a [ 405 U.S. Page 213]
The Secretary's new regulations permit discontinuance of disability benefits without affording beneficiaries procedural due process either in the form mandated by Goldberg v. Kelly, 397 U.S. 254 (1970), or in the form mandated by the District Court, 321 F.Supp. 383 (DC 1971). The regulations require only that the beneficiary be informed of the proposed suspension or termination and the information upon which it is based and be given an opportunity to submit a written response before benefits are cut off.*fn2a This procedure does not afford the beneficiary, as Goldberg requires for welfare and old-age recipients, an evidentiary hearing at which he may personally appear to offer oral evidence and confront and cross-examine adverse witnesses. Nor does the procedure satisfy the requirements of due process as determined by the District Court. That court held that the beneficiary must be given not only notice but also, before he responds, a "reasonable opportunity to examine the documentary evidence" upon which the Secretary relies and, in case of conflict in the evidence, a decision by an impartial decisionmaker. The court said, however, that an evidentiary hearing and opportunity to confront adverse witnesses [ 405 U.S. Page 214]
were not necessary, although "a hearing could be held" if the beneficiary "submitted some evidence that contradicts that possessed by the Administration." 321 F.Supp., at 387. Thus, under both Goldberg and the District Court's decision, the omissions in the Secretary's new regulations are fatal to the constitutional adequacy of the procedures. Because we may imminently be confronted with another case presenting the question, and because its resolution is vitally essential to the administration of an important Government program, today's action in avoiding decision of the constitutional question is not a responsible exercise of that practice. We gain a brief respite for ourselves while the Secretary, state agencies, and beneficiaries continue confused and uncertain. Moreover, the question has been thoroughly and ably argued and briefed on both sides, and we have the benefit of thoughtful and well-considered majority and dissenting opinions in the District Court. Today's disposition results in an unjustified waste, not only of our own all too sparse time and energies, but also of the time and energies of the three judges of the District Court who must again suspend their own heavy calendars to assemble for what can only be an empty exercise. I cannot join in the Court's abdication of our responsibility to decide this case.
Both the beneficiaries and the Secretary appeal from the District Court's judgment. The beneficiaries contend that the District Court erred in not holding that the procedure must afford an evidentiary hearing as in Goldberg. The Secretary contends that procedural due process requirements are satisfied by the "paper" hearing afforded by his new regulations. I agree with the beneficiaries and would therefore vacate the judgment of the District Court and remand with direction to enter a new judgment requiring the procedures held in Goldberg to be requisite with respect to discontinuance of welfare [ 405 U.S. Page 215]
and old-age benefits. See Wheeler v. Montgomery, 397 U.S. 280 (1970).
Section 225 of the Social Security Act, 42 U. S. C. § 425, provides that "if the Secretary, on the basis of information obtained by or submitted to him, believes that an individual entitled to benefits . . . may have ceased to be under a disability, the Secretary may suspend the payment of benefits . . . until it is determined . . . whether or not such individual's disability has ceased or until the Secretary believes that such disability has not ceased." The District Court held the statute unconstitutional on the ground that "the ex-parte suspension power granted to the Secretary by section 225 is summary adjudication that is inconsistent with the requirements of due process." 321 F.Supp., at 386.
First. The Secretary points out that the decision to discontinue disability benefits is generally made upon the basis of wage reports from employers and reports of medical examinations. This evidence, in the Secretary's view, "is highly reliable and not of a type that draws into issue veracity or credibility." Brief 10. [ 405 U.S. Page 216]
"The basis upon which disability benefits are suspended or terminated thus differs significantly from that upon which the terminations of welfare benefits involved in [ Goldberg ] rested." Id., at 25. Hence, the Secretary concludes, while procedural due process requires a pre-termination evidentiary hearing for welfare and old-age recipients, for disability beneficiaries a written presentation will suffice.
The Secretary, of course, recognizes that disability determinations often involve factual disputes. His new [ 405 U.S. Page 217]
procedures, as well as the post-termination procedures already available, presumably derive from that premise. The beneficiary may file a written response presenting rebuttal evidence before his benefits are suspended or terminated; after termination, he is entitled to reconsideration, based upon written submissions, and then a de novo evidentiary hearing, administrative appellate review of the hearing examiner's decision, and, finally, judicial review. Nevertheless, the Secretary insists that the decision to discontinue disability benefits differs from the decision to discontinue welfare benefits because the latter "may" be based upon "personal and social situations brought to the attention of the authorities by tips, rumor or gossip." Brief 25. Yet it is irrelevant how the matter is "brought to the attention of the authorities," whether "by tips, rumor or gossip" or otherwise. The question in a welfare determination, as in a disability determination, is simply whether the recipient continues to be eligible for benefits. Nor does the Secretary make clear the relevance of "personal and social situations." The Secretary does say that "one of the recipients in [ Goldberg ], for example, had been cut off because of her alleged failure to cooperate with welfare authorities in suing her estranged husband; payments to another were terminated because of alleged drug addiction." Ibid. The second recipient, however, was cut off because "he refused to accept counseling and rehabilitation." 397 U.S., at 256 n. 2. Consequently, both recipients lost their benefits for refusing to cooperate with the authorities. That, however, is no distinction from disability cases, for disability benefits will also be discontinued if the beneficiary refuses to cooperate.
To support the assertion that pre-termination hearings are required in welfare cases because "credibility and veracity" are in issue, the Secretary focuses upon [ 405 U.S. Page 218]
certain language in Goldberg. He first quotes the statement that "particularly where credibility and veracity are at issue, as they must be in many termination proceedings, written submissions are a wholly unsatisfactory basis for decision." Id., at 269. Apart from the obvious fact that that was not an absolute statement intended to limit hearings solely to those instances, it was but one of three reasons given to demonstrate that written submissions are insufficient. The Court also said that written submissions "are an unrealistic option for most recipients, who lack the educational attainment necessary to write effectively and who cannot obtain professional assistance" and that they "do not afford the flexibility of oral presentations; they do not permit the recipient to mold his argument to the issues the decisionmaker appears to regard as important." Ibid. Significantly, the Secretary does not deny that those reasons are as fully applicable to disability beneficiaries as to welfare recipients.
"Where governmental action seriously injures an individual, and the reasonableness of the action depends on fact findings, the evidence used to prove the Government's case must be disclosed to the individual so that he has an opportunity to show that it is untrue. While this is important in the case of documentary evidence, it is even more important where the evidence consists of the testimony of individuals whose memory might be faulty or who, in fact, might be perjurers or persons motivated by malice, vindictiveness, intolerance, prejudice, or jealousy. We have formalized these protections in the requirements of confrontation and cross-examination." 397 U.S., at 270 (emphasis added). [ 405 U.S. Page 219]
Again, however, the statement hardly indicates that confrontation and cross-examination are available to welfare recipients only because "credibility and veracity" are in issue. An individual has those rights because facts are in issue, as the statement makes clear. Moreover, the Court introduced its quotation of that statement in Goldberg by pointing out that "in almost every setting where important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses." Id., at 269 (emphasis added). And, even assuming the validity of the novel doctrine that confrontation and cross-examination are available solely for the purpose of testing "credibility and veracity," that would not justify depriving the disability beneficiary of "an effective opportunity to defend . . . by presenting his own arguments and evidence orally." Id., at 268. Finally, I see no reason to suppose, nor does the Secretary suggest any, that the "credibility and veracity" of doctors and employers can never be in issue in a disability case. Indeed, the Secretary's new regulations indicate that they may. See Disability Ins. State Manual § 353.
The premise of the Secretary's entire argument is that disability benefits are discontinued "only on the basis of an objective consideration -- that the previous disability has ceased -- and that conclusion rests on reliable information." Brief 26. Whether or not the information is reliable, the premise is questionable. The Secretary himself emphasizes that disability determinations require "specialized medical and vocational evaluations" and not simply the acquisition of "medical and other relevant data." Id., at 28. In any event, there are three grounds, pertinent here, upon which disability can be found to have ceased. None can fairly be characterized by the term "objective." [ 405 U.S. Page 220]
First, cessation of disability may be found if the beneficiary refuses to cooperate with the social security authorities. 20 CFR § 404.1539 (c); see Claims Manual § 6706 (e). That judgment, of course, could be wholly subjective, as the Secretary points out with reference to welfare cases.
Second, cessation may be found if the beneficiary "has regained his ability to engage in substantial gainful activity . . . as demonstrated by work activity." 20 CFR § 404.1539 (a)(2); see Claims Manual § 6706 (a). That decision does not, as the Secretary appears to assert, rest solely "upon regular reports made by [the beneficiary's] employers to the government." Brief 25. Rather, "the work performed" by the beneficiary "may demonstrate" that he is no longer disabled, but only if it "is both substantial and gainful." "Substantial work activity involves the performance of significant physical or mental duties, or a combination of both, productive in nature." A finding of "substantial gainful activity" depends upon the nature of the work performed, the adequacy of the performance, and the special conditions, if any, of the employment, as well as an evaluation of the time spent and the amount of money earned by the beneficiary. 20 CFR §§ 404.1532-404.1534.
Third, cessation of disability may be found if the evidence establishes medical recovery. 20 CFR § 404.1539 (a)(1); see Claims Manual § 6706 (c). That decision, of course, will be based upon medical examinations, but it does not follow that it is necessarily "objective." "The function of deciding whether or not an individual is under a disability is the responsibility of the Secretary," and a medical conclusion that the beneficiary is or is not disabled "shall not be determinative of the question." 20 CFR § 404.1526. The Secretary's decision that a beneficiary's impairment "is no longer of such severity as to prevent him from engaging [ 405 U.S. Page 221]
in any substantial gainful activity," 20 CFR § 404.1539 (a)(1), obviously depends upon more than an "objective" medical report, for the application of the legal standard necessarily requires the exercise of judgment. And, of course, multiple conflicting medical reports are "not uncommon." Richardson v. Perales, 402 U.S. 389, 399 (1971).
Second. The Secretary also contends that affording disability beneficiaries the opportunity to participate in evidentiary hearings before discontinuance of their benefits will result in great expense and a vast disruption of the administrative system. This justification for denial of pre-termination hearings was, of course, specifically rejected in Goldberg, 397 U.S., at 265-266, and [ 405 U.S. Page 222]
In Goldberg, the Court pointed out "that termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits." 397 U.S., at 264 (emphasis in original). That statement applies equally to eligible disability beneficiaries, for, as the District Court noted and the Secretary does not deny, "a disability beneficiary is by definition unable to engage in substantial gainful activity and he would, therefore, be liable to sustain grievous loss while awaiting the resolution of his claim." 321 F.Supp., at 386. In view of that result, the District Court concluded that the "fiscal and administrative expenses to the government, whatever their magnitude, are insufficient justification considering the crippling blow that could be dealt to an individual in these circumstances." Ibid. The Secretary's response is simply to stress the magnitude of the burden.
Here, as in Goldberg, "the requirement of a prior hearing doubtless involves some greater expense." 397 U.S., at 266. The Secretary points out that current procedures include a two-step determination of disability: first by the state agency, after a district office of the Social Security Administration has conducted a disability investigation, and then, on review of the state agency's determination, by the Administration's Bureau of Disability Insurance, which is located in Baltimore, Maryland.*fn3a Thus, the Secretary says, a prior hearing "either would require the beneficiary to travel great distances or would necessitate that State or federal officials travel to the area in which the beneficiary resides, [ 405 U.S. Page 223]
Except for bald assertion, the Secretary offers nothing to indicate that any great burden upon the system would result if the state agencies conducted the hearings. Moreover, the Secretary omits even to mention the existence of the current post-termination hearing procedures. See 20 CFR §§ 404.917-404.941. It is reasonable to assume that the only "restructuring" necessary would be a change in the timing of the hearings. That was apparently the method by which the Secretary required the States to comply with Goldberg in the administration of various other social security programs, see 45 CFR § 205.10, 36 Fed. Reg. 3034-3035, and it would seem to be an equally available response here. While the administration of the disability program to provide prior hearings may involve "some greater expense," as the Court noted in Goldberg, 397 U.S., at 266, that expense should not be exaggerated in order to deprive disability beneficiaries of their right to "rudimentary due process," id., at 267.
As to the disability program, the Secretary says that in 1971 there were 38,000 determinations that disability [ 405 U.S. Page 224]
Third, not only must every beneficiary request a prior hearing and every hearing affirm cessation of disability, it must also be true, to reach the $16 million figure, that the Secretary will be unable to recover any of the benefits paid to beneficiaries pending the hearings. That result [ 405 U.S. Page 225]
is unlikely. Section 204 (a)(1) of the Act, 42 U. S. C. § 404 (a)(1); see 20 CFR §§ 404.501-404.502, directs the Secretary, if he finds that there has been an overpayment, to require a refund from the beneficiary or to decrease any future benefits to which he may be entitled. Thus, if the beneficiary is not "disabled," he presumably can engage in "substantial gainful activity," and the Secretary may well secure a refund. If, on the other hand, the case is a close one and the beneficiary is later found to be "disabled" again, the Secretary may reduce his benefits. Furthermore, § 204 (b), 42 U. S. C. § 404 (b); see 20 CFR §§ 404.506-404.509, directs the Secretary not to require a refund or decrease benefits if the beneficiary "is without fault" and a refund or decrease "would defeat the purpose of" the Act or "would be against equity and good conscience." The Secretary's duty to waive claims for excess payments may well apply in many termination cases, particularly where the beneficiary is judgment proof. See 20 CFR § 404.508. Obviously, there is no loss to the social security fund if benefits paid to an ineligible beneficiary pending a hearing are subject to statutory waiver.
Finally, under § 223 (a)(1) of the Act, 42 U. S. C. § 423 (a)(1); see Claims Manual § 6707, benefits must be paid for two months after the month in which disability [ 405 U.S. Page 226]
Viewing Title II programs as a whole, the Secretary points out that there were nearly three million terminations of benefits in 1969. The vast majority of these terminations were for death, attainment of a certain age, and so forth, but the Secretary asserts that apart from those cases there were 515,189 terminations that would have been affected by the requirement of a prior hearing. That number, however, includes terminations based upon a student's leaving school, a change in a beneficiary's marital status, and the death or adoption of a child. Without those cases, the number drops to 186,035. Moreover, even this number includes disability terminations and the terminations of dependents based thereon. Putting aside those cases, the total appears to be somewhat closer to 100,000. While that is a substantial number of terminations, the Secretary does not indicate what issues are involved in making the decisions. As noted above, prior evidentiary hearings are necessary in disability cases because factual disputes exist. They may exist to a far lesser extent in other programs. Moreover, to whatever extent they do exist, the objections to the Secretary's inflated cost figure for disability terminations would seem to apply equally to non-disability terminations. In any event, the Secretary has simply provided the bare number of terminations, with no further information, and it [ 405 U.S. Page 227]
is inappropriate, if not impossible, to decide what effect requiring prior hearings in disability cases will have on non-disability cases.
I do not deny that prior hearings will entail some additional administrative burdens and expense. Administrative fairness usually does. But the Secretary "is not without weapons to minimize these increased costs." Goldberg v. Kelly, 397 U.S., at 266. Despite the Secretary's protestations to the contrary, I believe that in the disability, as in the welfare, area "much of the drain on fiscal and administrative resources can be reduced by developing procedures for prompt pre-termination hearings and by skillful use of personnel and facilities." Ibid. The Court's conclusion on this point in Goldberg is fully applicable here: