Source: http://openjurist.org/print/180664
Timestamp: 2013-12-10 13:27:41
Document Index: 394595431

Matched Legal Cases: ['§ 303', '§ 301', '§ 301', '§ 9', '§ 1382', '§ 1383', '§ 416', '§ 405', '§ 405', '§ 1383']

539 F2d 1111 Johnson v. F Mathews
539 F.2d 1111
Gilbert JOHNSON, Individually and on Behalf of all otherssimilarly situated, Appellee-Appellant,v.F. David MATHEWS, Secretary of the Department of Health,Education & Welfare, Appellant-Appellee.
Nos. 75-1297, 75-1345.
Submitted Nov. 10, 1975.Decided June 15, 1976.
Harry R. Silver, Appellate Section, Civ. Div., U. S. Dept. of Justice, Washington, D. C., for F. David Mathews of HEW; Rex E. Lee, Asst. Atty. Gen., Jefferson City, Mo., Donald J. Stohr, U. S. Atty. (Barry Short, U. S. Atty. effective May 15, 1976), St. Louis, Mo., William Kanter and John M. Rogers, Attys. Appellate Section, Civ. Div., Dept. of Justice, Washington, D. C., on brief.
Walter Heiser, Legal Aid Society of City of St. Louis, St. Louis, Mo., for Gilbert Johnson.
This is a class action brought on behalf of individuals in Missouri who began receiving Aid to the Permanently and Totally Disabled (PTD) benefits from the State of Missouri after July 1, 1973, but before December 31, 1973, and were thereafter initially determined to be ineligible for benefits under the federal Supplemental Security Income for Aged, Blind and Disabled (SSI) program, which supplanted the Missouri PTD program in January, 1974. The District Court entered both preliminary and permanent injunctive relief enjoining the Secretary of Health, Education, and Welfare from withholding benefits from the individual plaintiff and the members of the class until they were given notice of and an opportunity for an evidentiary hearing prior to any termination of such benefits. The District Court, however, refused to order the defendant to make retroactive payments of benefits to the individual plaintiff or members of the class. Both plaintiff and defendant appeal. For the reasons stated below, we affirm the judgment of the District Court.1
A review of the history of the state PTD and federal SSI programs is necessary for a proper evaluation of the various claims in this case.
In October, 1972, Congress repealed the categorical assistance program of federal grants to state administered disability assistance programs for the aged, blind, and disabled (Title XIV of the Social Security Act). Pub.L.No.92-603, § 303 (Oct. 30, 1972). In its place, Congress established, in Title XVI of the Social Security Act, a new income maintenance program, effective as of January 1, 1974, which replaced the state administered programs with the federal SSI program establishing uniform eligibility criteria. Pub.L.No. 92-603, § 301. Under the SSI program, the federal government was to administer the program and was to assume the burden of providing benefits to those persons who were disabled as defined by the Act.
As originally enacted, the SSI program provided that a person found permanently and totally disabled under an approved state plan in effect in October, 1972, would automatically be considered disabled for purposes of the SSI program if he received state aid during December, 1973, and remained continuously disabled. Pub.L.No.92-603, § 301. On December 31, 1973, one day before the SSI program was to become effective, Congress amended Pub.L.No. 92-603 to require that in addition to receiving benefits during December, 1973, an individual must have received benefits for one month prior to July, 1973, in order to qualify under the "grandfather" clause. Pub.L.No.93-233, § 9 (Dec. 31, 1973); see 42 U.S.C. § 1382c(a)(3)(E). The purpose of this amendment was "to prevent the conversion to the Federal program of persons who in months immediately prior to the January 1974 changeover to SSI may have been improperly placed on the State aid to the disabled rolls." H.R.Rep.No.93-871, 2 U.S.Code Cong. & Admin.News, p. 2808 (1974). See also H.R.Rep.No.93-627, 2 U.S.Code Cong. & Admin.News, pp. 3177, 3183 (1973). Thus, as of January 1, 1974, the federal government had for all practical purposes taken over the payments of benefits to the disabled needy. Those individuals who were receiving Missouri PTD benefits as of December 31, 1973, and who had also received such benefits for at least one month prior to July, 1973, were conclusively presumed to meet the federal standards of disability and began receiving SSI benefits.
The plaintiff and members of the class in this case are individuals who were receiving state PTD benefits in December, 1973, but who had commenced receiving those benefits after July 1, 1973, and were thus not automatically qualified under the federal program. These persons had to meet the federal standard of disability in order to receive benefits under the SSI program.
The last minute amendment to the "grandfather" clause presented the Secretary with the problem of dealing with those individuals who had commenced receiving benefits under a state plan between July and December, 1973, but were facing termination of benefits. Although no statutory provisions existed as of January 1, 1974, to pay benefits to these "rollback" cases as such, the Secretary used a statutory provision, ostensibly aimed at initial applicants who were found to be presumptively disabled, to continue payments to persons who had not yet been initially determined to be qualified. See 42 U.S.C. § 1383(a)(4)(B), which provides that before an initial determination of eligibility the Secretary may pay benefits for a period of up to three months to those whom he judges to be presumptively disabled. By regulation, the Secretary classified rollback cases as presumptively disabled. See 20 C.F.R. § 416.954. Under this system, the rollback recipient would receive presumptive SSI benefits until an initial determination of eligibility. If the initial determination was adverse to the party's claim for SSI benefits, presumptive disability benefits ceased immediately. The unsuccessful claimant then had the right to have this determination reconsidered in a proceeding where notice and hearing rights were provided. However, no benefits were provided after an adverse initial determination. The initial determination was made upon the basis of a paper review of the records maintained under Missouri's disability assistance program and without notice or an opportunity to be heard.
At the urging of the Secretary, Congress passed, in March, 1974, legislation extending the period during which the Secretary might pay presumptive SSI disability benefits to rollback recipients from three months to the period ending on December 31, 1974. Pub.L.No.93-256 (March 28, 1974). Congress also provided "that no such benefits may be paid on the basis of such presumptive disability for any month after the month in which the Secretary of Health, Education, and Welfare has made a determination as to whether such individual is disabled * * *." Id.
Plaintiff represents a class of persons who have received adverse initial determinations but who have not yet had their cases reconsidered, and thus they would not have received SSI benefits beyond the initial determination date except for the District Court's injunctive order. The District Court's injunction was based upon its holding that the individual plaintiff and the members of the class he represents were entitled to notice and a hearing before the benefits they were receiving on the basis of presumptive disability could be terminated.
The District Court first issued a temporary restraining order preventing discontinuance of payments to the plaintiff and the class members until they were given a pre-termination hearing. The District Court initially refused to accept the government's contention that retroactive SSI benefits were barred by the sovereign immunity doctrine, but later did issue a stay of any retroactive relief pending disposition on the merits. The District Court then issued a permanent injunction incorporating its prior orders. Apparently, the District Court held that the payment of retroactive SSI benefits was barred by sovereign immunity since it incorporated the stay into its final order. The government appeals from the District Court's decree granting injunctive relief;2 the plaintiff appeals from the denial of retroactive payment of SSI benefits.
The government originally contended on appeal that the District Court lacked federal subject matter jurisdiction, relying upon Weinberger v. Salfi,422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). It now concedes that jurisdiction may be found under 42 U.S.C. § 405(g)3 in light of the recent Supreme Court opinion in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); we agree.4 In Eldridge, the Court explained the application of the test announced in Salfi :
Salfi identified several conditions which must be satisfied in order to obtain judicial review under § 405(g). Of these, the requirement that there be a final decision by the Secretary after a hearing was regarded as "central to the requisite grant of subject matter jurisdiction . . . ." Id., 422 U.S. at 764, 95 S.Ct. at 2466. Implicit in Salfi however, is the principle that this condition consists of two elements, only one of which is purely "jurisdictional" in the sense that it cannot be "waived" by the Secretary in a particular case. The waivable element is the requirement that the administrative remedies prescribed by the Secretary be exhausted. The nonwaivable element is the requirement that a claim for benefits shall have been presented to the Secretary. Absent such a claim there can be no "decision" of any type. And some decision by the Secretary is clearly required by the statute. (footnote omitted)
96 S.Ct. at 899.5
As in Eldridge, the special circumstances of this case warrant our holding that the test of Salfi has been met. First, the plaintiff and the members of the class have effectively presented a claim to continued presumptive disability benefits to the Secretary. When the administration of the program shifted from state to federal authorities, the files of the plaintiff and the class members were transferred to the federal authorities and no more information was solicited from the claimants. The plaintiff was notified by letter that his case was under review and that he would not be required to provide any additional information or do anything further unless notified. The Secretary clearly had the plaintiff's claim for continued benefits before him, and no more could have been done by the plaintiff to present the claim. Likewise, the claims of all the members of the class were before the Secretary. We thus conclude that the first element of this Salfi condition was met. Second, this case presents exactly the same claim for a pre-termination hearing as was presented in Eldridge, where the Court held that denial of the request for benefits constituted a final decision for the purposes of Section 405(g) jurisdiction over the collateral constitutional claim to a pre-termination hearing.
We conclude therefore that the District Court had jurisdiction under Section 405(g) as made applicable to the SSI program by 42 U.S.C. § 1383(c)(3).
Whether or not the plaintiff and the members of the class are entitled to an evidentiary hearing prior to the termination of the presumptive disability payments under the SSI program involves a two-step analysis. The first determination is whether the plaintiff had a "property" interest in the continued payment of the benefits so that the dictates of procedural due process apply.6 See Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). Once it is decided that procedural due process is applicable, the second step is the determination of what process is due. See Greenhill v. Bailey, 519 F.2d 5, 9 (8th Cir. 1975).
The Secretary contends (1) that the plaintiff had no protected property interest in the continued receipt of the SSI presumptive disability benefits since the legislation creating that program evidences no intent to confer such an interest on the plaintiff and the members of the class which he represents; and (2) that, even if the plaintiff had a property interest in the continued receipt of benefits, any such interest terminated on December 31, 1974, since under Pub.L.No.93-256 the Secretary's statutory authority to pay presumptive disability benefits terminated on that day.
The plaintiff contends (1) that a protected property interest is to be found in the continuing nature of the SSI program as it replaced the state PTD program, in the policies and practices of the Secretary with respect to the notices and letters he sent to the plaintiff, and in the statutory creation of the Secretary's authority to pay presumptive benefits; and (2) that the property interest did not terminate on December 31, 1974.
The Supreme Court established the principles and guidelines to be applied in determining whether a claimed interest constitutes a protected property interest in Board of Regents v. Roth, supra, and Perry v. Sindermann, supra. In Roth, the Court said:
The Fourteenth Amendment's procedural protection of property is a safeguard of the security of interests that a person has already acquired in specific benefits. These interests property interests may take many forms.
Thus, the Court has held that a person receiving welfare benefits under statutory and administrative standards defining eligibility for them has an interest in continued receipt of those benefits that is safeguarded by procedural due process. Goldberg v. Kelly, 397 U.S. 254 (90 S.Ct. 1011, 25 L.Ed.2d 287). * * *
* * * To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. It is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined. It is a purpose of the constitutional right to a hearing to provi