Source: http://il.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19810810_0040313.C07.htm/qx
Timestamp: 2017-01-17 05:27:35
Document Index: 575393970

Matched Legal Cases: ['§ 404', '§ 404', '§ 404', '§ 404', '§ 405', '§ 404', '§ 404', '§ 405', '§ 405', '§ 404', '§ 405', '§ 405', '§ 405', '§ 405', '§ 404', '§ 404']

| Giacone v. Richard S. Schweiker Secretary of Health and Human Services
Giacone v. Richard S. Schweiker Secretary of Health and Human Services
MARTIN J. GIACONE, PLAINTIFF-APPELLANT,v.RICHARD S. SCHWEIKER,*FN* SECRETARY OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE .
Appeal from the United States District Court for the Northern District of Illinois, Western Division. No. 78-C-20092 -- Stanley J. Roszkowski, Judge .
Before Fairchild and Cudahy, Circuit Judges, and Templar,*fn* Senior District Judge.
On June 14, 1967, Giacone filed a claim for retirement insurance benefits under the Act. The Social Security Administration computed his "primary insurance amount"*fn1 and began to make the appropriate monthly payments to Giacone. Shortly after he began to receive these payments, Giacone returned to work.
Giacone took the Secretary's letter to his local Social Security office in Rockford, Illinois, seeking an explanation for the Secretary's decision. According to the complaint, a clerk listened to Giacone's claim and told him that the case would be "looked into." Over the next six months, Giacone returned to the Rockford office on six separate occasions in an attempt to follow-up on the status of his claim.*fn2 On each visit, Social Security personnel offered various excuses for their failure to pursue Giacone's claim.*fn3
On January 17, 1977, Giacone filed a formal request for reconsideration of the Secretary's July 2, 1976, denial of his claim for additional benefits. Regulations in effect at that time allowed a claimant six months to request reconsideration of an initial determination by the Secretary. 20 CFR § 404.911 (1976).*fn4 For Giacone, the six month period expired on January 7, 1977. Hence, his request for reconsideration, dated January 17, 1977, was ten days late. On June 2, 1977, the Secretary denied reconsideration of Giacone's claim on the grounds that the request was not timely filed.
Title II of the Social Security Act and the regulations which accompany it attempt to create an orderly, and not unduly vexatious, system for administrative and judicial review of the unimaginable number of decisions of claims for retirement and disability benefits filed under the Act. Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L. Ed. 2d 192 (1977). An individual steps up to the administrative starting line by filing a claim for benefits with the Social Security Administration. The gun sounds with the decision to grant or deny this claim, which is known as the "initial determination" of the Secretary. 20 CFR §§ 404.905-404.907 (1979). The claimant who receives an adverse "initial determination" satisfactorily jumps his first hurdle by filing a request for reconsideration. 20 CFR §§ 404.909-404.913 (1979). The Secretary then acquires discretion to review the merits of the claim for a second time and issue what is impressively denominated a "reconsidered determination." 20 C.F.R. § 404.914 (1979). After obtaining both an initial and reconsidered determination, the dissatisfied claimant, now breaking into full stride, files for an evidentiary hearing before an administrative law judge. 42 U.S.C. § 405(b) (1979); 20 CFR §§ 404.917-404.919 (1979). Before breaking the ribbon at the end of the administrative finish line, the claimant must appeal the ALJ's hearing decision to the Appeals Council, which is the final arbiter and "supreme administrative court" in the agency process. 20 CFR §§ 404.945-404.947a (1979).
Judicial review of individual claims for benefits is permitted only in accordance with the provisions of Section 405(g) of the Act. 42 U.S.C. § 405(h) (1979); Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L. Ed. 2d 192 (1977); Weinberger v. Salfi, 422 U.S. 749, 95 S. Ct. 2457, 45 L. Ed. 2d 522 (1975). Before a federal district court may acquire jurisdiction of an action pursuant to Section 405(g), the claimant must have received a "final decision of the Secretary made after a hearing" to which the claimant was a party. 42 U.S.C. § 405(g) (1979). Although a decision rendered on a claim at each stage of the administrative process is final and binding on the parties,*fn5 the regulations define a "final decision of the Secretary" for the purpose of Section 405(g) as a decision rendered by the Appeals Council which either reviews or denies review of a determination made by an ALJ after an evidentiary hearing on the merits of the claim. 20 CFR §§ 404.940, 404.951 (1979). Thus, the statute and the regulations permit the federal courts to review only a narrowly circumscribed sort of decision by the Secretary, namely, one which is "final" and "made after a hearing." Salfi, 422 U.S. at 764, 95 S. Ct. at 2466.
Although we believe that the district court erred in dismissing Giacone's complaint, we decline to adopt Giacone's jurisdictional analysis, which is in direct conflict with the clear language of the Social Security Act. Section 405(h) states, "no findings of fact or decision of the Secretary shall be reviewed by any person, tribunal or governmental agency except as herein provided." 42 U.S.C. § 405(h) (1979). The Supreme Court has concluded that this provision was intended to "prevent review of decisions of the Secretary save as provided in the Act, which provision is made in § 405(g)." Salfi, 422 U.S. at 757, 95 S. Ct. at 2463. The regulations promulgated pursuant to the Act must be construed to carry out the clear intent of this statutory language. Rucker v. Wabash R.R., 418 F.2d 146, 149-50 (7th Cir. 1969). Section 405(g) confers jurisdiction to review an administrative denial of Social Security benefits only when the claimant had obtained a "final decision by the Secretary after a hearing." Sanders, 430 U.S. at 108, 97 S. Ct. at 986; Salfi, 422 U.S. at 764, 95 S. Ct. at 2466. To construe Section 422.210(a) as an independent basis for judicial review as Giacone suggests would circumvent the hearing requirement and contradict the express command of Section 405(g). Thus, the denial of Giacone's claim is reviewable under Section 405(g) or not at all.
Giacone suggests that the provisions of Section 405(g) permit this court to review a determination that a claimant failed to establish "good cause" to file a late request for reconsideration. Since a "good cause" determination is left primarily to the Secretary's discretion, the standard for review, according to Giacone, is whether the Secretary acted arbitrarily or unreasonably in deciding that a claimant lacked good cause to file a tardy request. This argument is not persuasive, however, when considered in light of the Supreme Court's decision in Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L. Ed. 2d 192 (1977).*fn6
In Sanders, the Court held that Section 405(g) did not authorize judicial review of alleged abuses of agency discretion in refusing to reopen a prior application for Social Security benefits. Id. at 107-08, 97 S. Ct. at 985. Emphasizing that Section 405(g) "clearly limits judicial review to ... a "final decision of the Secretary made after a hearing,' " the Court noted that the Act does not require a hearing prior to the denial of a petition to reopen a final decision on an individual claim for benefits. Id. at 108, 97 S. Ct. at 986. See 42 U.S.C. § 405(b) (1976). Since the opportunity to reopen a final decision was conferred upon claimants by the Secretary's regulations rather than by the Act itself,*fn7 the Sanders Court concluded that judicial review of the denial of a petition to reopen would "frustrate the Congressional purpose, plainly evidenced in § (4)05(g) to impose a ... limitation upon judicial review of the Secretary's final decision on the initial claim for benefits." Id.
The instant case presents a closely analogous problem. Claimants are afforded an opportunity to obtain an extension to file a request for reconsideration pursuant to the Secretary's regulations, and the Act permits such a request to be denied without a hearing. 42 U.S.C. § 405(b) (1979); 20 CFR §§ 404.953-404.954a (1979). "(W)ere we to recognize a rule authorizing judicial review of refusals to extend filing deadlines different from that imposed by the Supreme Court with regard to requests to reopen, claimants could circumvent the Sanders holding merely by filing for extensions." Watters v. Harris, 656 F.2d 234 (7th Cir. 1981). Such a result would subvert the express language of Section 405(g) and would undermine the entire administrative superstructure created by the Social Security Act. "Congress' determination to limit judicial review (of Social Security claims) is a policy choice obviously designed to forestall repetitive or belated litigation of stale eligibility claims. Our duty, of course, is to respect that choice." Sanders, 430 U.S. at 108, 97 S. Ct. at 986.
Our decision with respect to review of "good cause" determinations does not, however, entirely preclude judicial review of Giacone's complaint under Section 405(g). Although the jurisdictional limitations of Section 405(g) are quite specific, they are not all-embracing. In Mathews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976), the Supreme Court explained that a final decision by the Secretary after a hearing rests upon two prerequisites: 1) the presentation of a claim for benefits; and 2) the exhaustion of administrative remedies. Since the presentation of a claim for benefits is indispensable to obtaining a decision of any type, the first prerequisite is a purely jurisdictional requirement with which compliance is mandatory. Id. at 328, 96 S. Ct. at 899. In the instant case, it is undisputed that Giacone submitted such a claim to the Secretary.
Compliance with the second requirement, however, may be waived in certain circumstances. If a claimant raises a constitutional challenge which is entirely collateral to his claim of entitlement, and "the claimant's interest in having the issue resolved promptly is so great that deference to the agency's judgment is inappropriate," the court may review the case pursuant to Section 405(g) despite the claimant's failure to exhaust administrative remedies. Id. at 330, 96 S. Ct. at 900. We believe that Giacone's "good cause" argument gives rise to a due process claim sufficiently grave to permit us to waive his failure to obtain a final decision of the Secretary after a hearing under the Eldridge analysis.
Mathews v. Eldridge, 424 U.S. at 335, 96 S. Ct. at 903.
In the instant case, the claimant's interest in receipt of the full amount of benefits due under the Act is exceedingly strong. An erroneous determination of a claimant's primary insurance amount could cause major financial hardship for an elderly or disabled individual who may be entirely dependent upon these monthly payments for support. Social Security beneficiaries thus deserve full due process protection while pursuing a disputed claim for benefits through the twists and turns of the administrative process.*fn8
The government's interest in the efficient and economic administration of the Social Security system would not be significantly affected by the institution of a notice requirement in cases where "good cause" is in issue. At most, this new procedure would require a separate mailing to claimants who have submitted tardy filings to the Social Security Administration informing them of the availability of extensions of the filing deadline upon a showing of "good cause" and, of course, the considerations which are involved in a "good cause" determination. See 20 CFR §§ 404.953-404.954a (1979). It may be entirely possible, however, to amend existing notice forms to add the necessary "good cause" extension information. In view of the importance of the "good cause" determination to an individual seeking review of the merits of a tardy claim, we believe that this relatively simple and inexpensive procedure is justified. Therefore, we conclude that in this case, where serious, if not outrageous and misleading conduct by agency employees is alleged, the ALJ's failure to inform Giacone that "good cause" was in issue deprived Giacone of his right to due process. Cf. Carey v. Quern, 588 F.2d 230 (7th Cir. 1978). In light of this constitutional error, we have jurisdiction of the cause. Mathews v. Eldridge, 424 U.S. at 330-31, 96 S. Ct. at 900.
(e) The individual requested additional explanation concerning the Social Security Administration's decision within the time limit, provided that, within 60 days (*fn9 ) after receipt of such explanation he requested reconsideration or hearing, ...;