Source: https://law.justia.com/cases/federal/appellate-courts/F2/412/44/290475/
Timestamp: 2020-08-11 10:06:28
Document Index: 386707162

Matched Legal Cases: ['§ 405', '§ 1291', '§ 1291', '§ 405', '§ 405', '§ 556', '§ 1006', '§ 1016', '§ 556']

Wilbur J. Cohen, Secretary of Health, Education and Welfare, Appellant, v. Pedro Perales, Appellee, 412 F.2d 44 (5th Cir. 1969) :: Justia
Wilbur J. Cohen, Secretary of Health, Education and Welfare, Appellant, v. Pedro Perales, Appellee, 412 F.2d 44 (5th Cir. 1969)
US Court of Appeals for the Fifth Circuit - 412 F.2d 44 (5th Cir. 1969) May 1, 1969
COPYRIGHT MATERIAL OMITTED Ted Butler, Asst. U. S. Atty., Ernest Morgan, U. S. Atty., San Antonio, Tex., Michael C. Farrar, Kathryn H. Baldwin, Attys., Dept. of Justice, Washington, D. C., Edwin L. Weisl, Jr., Asst. Atty. Gen., for appellant.
Pedro Perales, Appellee, hereinafter called claimant, filed an application for social security benefits in April 1966, claiming that a back injury received by him on September 29, 1965, had disabled him. This application was filed with the Secretary of Health, Education and Welfare, hereinafter called "the Secretary" or "HEW," under 42 U.S.C.A. Sections 416(i) (1) and 423 of the Social Security Act. His application was disapproved, and, thereafter, he requested and was granted a hearing before an examiner. The hearing consisted of two sessions, the first of which was held in San Antonio, Texas, on January 12, 1967. The supplemental hearing was held on March 31, 1967.
The examiner also allowed a Dr. Lewis A. Leavitt to testify over the objection of claimant. He had been flown from Houston to San Antonio by HEW to testify as an expert in the case. He had never examined the claimant and his testimony consisted of his "interpretation" of the medical reports of the absent doctors mentioned above. The claimant objected to this testimony because it was hearsay based on hearsay and because the witness' answers were not confined to hypothetical questions. Actually, he was not asked any hypothetical questions. The examiner allowed this witness to "interpret" the reports of the absent doctors in such a way as to indicate that claimant was not disabled.
The three basic questions to be decided here are: (1) Was the decision of the trial court an appealable one? (2) Is hearsay evidence, when objected to, admissible in an administrative agency hearing such as the HEW hearing in this case? (3) If hearsay evidence is admissible over objection in an administrative agency hearing, such as that of the HEW in this case, is such hearsay evidence, standing alone and without more, substantial evidence? We will consider these questions in the order given. It is our view that this case is an appealable one. We think this question is governed by the provisions of 42 U.S.C. § 405(g) which provides:
It will be noted that this statute authorizes the court to enter a judgment "affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing." The statute also states that such judgments "shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions." Of course, 28 U.S.C. § 1291 gives the courts of appeals jurisdiction to review appeals from all final decisions of the district courts.
It appears clear to us that here where the district court entered an order denying the motions for summary judgment and reversing the decision of the Secretary and remanding the case to the Secretary for a full new hearing, in accordance with his order of remand, the case is an appealable one. See Jamieson v. Folsom, 7 Cir., 1963, 311 F.2d 506, cert. denied, 374 U.S. 487, 83 S. Ct. 1868, 10 L. Ed. 2d 1043 (1963); Gardner v. Moon, 8 Cir., 1966, 360 F.2d 556, 558, and Celebrezze v. Lightsey, 5 Cir., 1964, 329 F.2d 780.
Also, we think the remand order is final within the meaning of 28 U.S.C. § 1291. The finality requirement of this section has usually been given a practical rather than a technical construction. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949); Gillespie v. United States Steel Corp., 379 U.S. 148, 152, 85 S. Ct. 308, 13 L. Ed. 2d 199 (1964).
It should be noted that not all orders under 42 U.S.C. § 405(g) are appealable. In situations where the Secretary moves the court before he files an answer, or at the request of either party, the court remands the case for additional evidence, the order would not be appealable. An order remanding the case for additional or supplementary evidence, without a review by the court of the administrative record nor a decision by it on the substantial evidence question, is without doubt an interlocutory order and is not appealable. Likewise, an order sua sponte by the court for the taking of additional evidence is not appealable. Bohms v. Gardner, 8 Cir., 1967, 381 F.2d 283, cert. denied, 390 U.S. 964, 88 S. Ct. 1069, 19 L. Ed. 2d 1164 (1968).
This decision appears to fall in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated. The Court has long given this provision of the statute this practical rather than a technical construction. * * *. Id. at 546, 69 S. Ct. at 1225.
We next consider the question of whether or not hearsay evidence, when objected to, is admissible in an administrative hearing, such as the hearing in this case. The claimant contends that the admission of hearsay evidence denies him the right to be confronted by his adversary witnesses and the right of cross-examination. We must look first to the statute enacted by Congress governing this problem. We find that 42 U.S.C. § 405(a) and (b) provides:
This provision of the statute and regulation clearly authorize the admission of hearsay evidence into the record of an administrative hearing of the HEW such as that involved here. The claimant and the Bexar County Legal Aid Society, who appear here as an amicus curiae, contend that the Administrative Procedure Act entitles the claimant to the right of cross-examination and that the admission of hearsay evidence denies him that right. They cite the provision of the Act in 5 U.S.C. § 556(d) which provides:
* * * [Do] not supersede the conduct of specified classes of proceedings, in whole or in part, by or before boards or other employees specifically provided for by or designated under statute.1
* * * Moreover, sec. 7(c) of the Administrative Procedure Act, 5 U.S. C.A. § 1006(c), expressly provides that "Every party shall have the right * * * to conduct such cross-examination as may be required for a full and true disclosure of the facts." Id. at 277.
The claimant complains of the admission of hearsay evidence and the denial of confrontation of adverse witnesses and the right of cross-examination as if they were all one and the same. Actually, they are different and must be treated separately. While it is true that the admission of hearsay testimony denies the claimant the right of cross-examination, at least temporarily, still, he has his remedy under the regulations issued by the Secretary. These regulations give the hearing examiner the authority to subpoena witnesses on his own motion or at the request of a party.2 While it is true the regulations require a party to request subpoenas for witnesses five days before the hearing and a claimant might not know at that time what witnesses he would need to subpoena in order to cross-examine the authors of hearsay evidence to be introduced by the Secretary, still he could ask for a postponement or a supplemental hearing in order that he might have the witnesses present. If this was refused, he would have a valid objection that could be urged on appeal. But that is not the case here. Actually, there was a supplemental hearing in this case. The claimant could have requested subpoenas for the absent doctors requiring them to be present at the later hearing, but he did not do so. The cases are clear that where a party has the right to subpoena witnesses by requesting the agency representative to issue them, and he does not make the request, he cannot later complain of the fact that he has been denied the right of confrontation of adverse witnesses and the right of cross-examination. See Williams v. Zuckert, 371 U.S. 531, 83 S. Ct. 403, 9 L. Ed. 2d 486 (1963) and 372 U.S. 765, 83 S. Ct. 1102, 10 L. Ed. 2d 136 (1963); Begendorf v. United States, 340 F.2d 362, 169 Ct. Cl. 293 (1965); McTiernan v. Gronouski, 2 Cir., 1964, 337 F.2d 31, 37.
However, as pointed out above, this is entirely different to the objection of claimant to the admission of hearsay evidence. The correct rule as to the admission of hearsay evidence by an administrative agency was stated by the court in Morelli v. United States, 177 Ct. Cl. 848, 853-854 (1966) as follows:
* * * [T]he hearsay rule is not applicable to administrative hearings so long as the evidence upon which a decision is ultimately based is both substantial and has probative value.
To the same effect is Montana Power Co. v. Federal Power Commission, 1950, 87 U.S.App.D.C. 316, 185 F.2d 491, 497, cert. denied, 340 U.S. 947, 71 S. Ct. 532, 95 L. Ed. 683 (1951); and Willapoint Oysters, Inc. v. Ewing, 9 Cir., 1949, 174 F.2d 676, 690, cert. denied, 338 U.S. 860, 70 S. Ct. 101, 94 L. Ed. 527 (1949).
The Supreme Court defined substantial evidence in NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 299-300, 59 S.Ct 501, 83 L. Ed. 660 (1939) as follows:
* * * [F]indings by administrative bodies, means evidence which is substantial, that is, affording a substantial basis of fact from which the fact in issue can be reasonably inferred. Washington, Virginia & Maryland Coach Co. v. National Labor Relations Board, 301 U.S. 142, 57 S. Ct. 648, 81 L. Ed. 965; Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 59 S. Ct. 206, 83 L. Ed. 126; Appalachian Electric Power Co. v. National Labor Relations Board, 4 Cir., 93 F.2d 985, 989; National Labor Relations Board v. Thompson Products Inc., 6 Cir., 97 F.2d 13; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F.2d 758, 764. Substantial evidence is more than a scintilla, and must do more than create a suspicion of the existence of the fact to be established. "It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion," Consolidated Edison Co. v. National Labor Relations Board, supra, 305 U.S. p. 229, 59 S. Ct. p. 217, and it must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury. See Baltimore & Ohio R. Co. v. Groeger, 266 U.S. 521, 524, 45 S. Ct. 169, 69 L. Ed. 419; Gunning v. Cooley, 281 U.S. 90, 94, 50 S. Ct. 231, 74 L. Ed. 720; Appalachian Electric Power Co. v. National Labor Relations Board, supra, 93 F.2d 989.5
The rule announced in the Morelli case supra, and the other cases cited above, allow hearsay evidence to be received by administrative agencies "so long as the evidence upon which a decision is ultimately based is both substantial and has probative value." (Emphasis supplied.) The Supreme Court held many years ago in the case of Consolidated Edison Co. v. NLRB, 305 U.S. 197, 230, 59 S. Ct. 206, 83 L. Ed. 126 (1938):
* * * Mere uncorroborated hearsay or rumor does not constitute substantial evidence.
* * * " [S]ubstantial evidence" includes more than "uncorroborated hearsay" * * *. Id. 174 F.2d at 691.
In Hill v. Fleming, 169 F. Supp. 240 (W.D. Pa. 1958), the court held:
Conclusion of facts must be supported by substantial evidence. * * * "Substantial evidence is more than a mere scintilla. * * * Mere uncorroborated hearsay or rumor does not constitute substantial evidence." Id. at 78.
In 32A C.J.S. Evidence § 1016 (1964), it is stated:
In Frank Camero v. United States, 345 F.2d 798, 800, 170 Ct. Cl. 490, 493-494 (1965), the court held:
* * * The Supreme Court has construed "substantial evidence" to be "* * * more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S. Ct. 206, 83 L. Ed. 126 (1938). The Court added (at 230, 59 S. Ct. at 217), "Mere uncorroborated hearsay or rumor does not constitute substantial evidence." * * *
The Consolidated Edison Co. case, supra, is unquestionably a correct statement of the law. See NLRB v. Fansteel Metallurgical Corp., 306 U.S. 240, 257, 59 S. Ct. 490, 83 L. Ed. 627 (1939); NLRB v. Columbian Enameling & Stamping Co., supra; and Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S. Ct. 456, 95 L. Ed. 456 (1951).
* * * However, since "substantial evidence" includes more than "uncorroborated hearsay" and "more than a mere scintilla," the findings, to be valid, cannot be based upon hearsay alone, nor upon hearsay corroborated by a mere scintilla. * * * [Emphasis supplied.] Id. 174 F.2d at 691.
* * * [A]gency findings "cannot be based upon hearsay alone".6
The testimony of the "expert" Dr. Leavitt, cannot serve to corroborate the hearsay reports of the absent doctors. His testimony was correctly described by the trial court as "hearsay on hearsay." Multiple hearsay is no more competent than single hearsay. United States v. Grayson, 2 Cir., 1948, 166 F.2d 863, 869; United States v. Bartholomew, 137 F. Supp. 700, 709 (W.D. Ark. 1956).
Applying these principles to the case before us, it is clear that the hearsay reports of the absent doctors were admissible in evidence before the hearing examiner. This is also true with respect to the testimony of the so-called "expert" Dr. Leavitt. However this leaves the Secretary with nothing but uncorroborated hearsay, which the claimant has objected to, on which to base his decision. Under the decisions, such evidence is not substantial evidence. This is especially true in view of the fact that on the other side of the case we have the live and direct legal testimony of the claimant and his doctor which supports his claim. The trial court was correct in his remarks in the record that if he was called upon to render a final judgment in the case, he would render it for the claimant and against the Secretary, because the only probative evidence in the case that was not hearsay and that was substantial was in favor of the claimant.8 We agree that he would have been justified in entering judgment for the claimant for disability benefits in view of the foregoing and based on the law announced by the courts in other similar cases, a discussion of which follows:
The case of Mefford v. Gardner, 6 Cir., 1967, 383 F.2d 748, 759-761, was very similar to the case before us. The claimant and his doctors who had treated him testified he was disabled. The examiner had an "expert" doctor (Dr. London) to examine the various medical reports the examiner had introduced and then testify, without ever having seen or treated the claimant, to the effect the claimant was not disabled. This is exactly what Dr. Leavitt did in the case here. The court in that case held that such testimony was not substantial evidence, stating:
* * * We reach the conclusion that, * * * the opinion of a doctor who never examined or treated the claimant cannot serve as substantial evidence to support the Secretary's finding. [Emphasis supplied.] Id. at 520-521.
The courts reach the same decision even if the Secretary's expert doctor has examined the claimant (usually one time) for the purpose of testifying. This occurred in Sebby v. Flemming, 183 F. Supp. 450 (W.D. Ark. 1960). The testimony of the Secretary's doctor that the claimant was not disabled conflicted with that of the claimant's doctors who had been treating him. The court said:
The only evidence in support of the Referee's findings is the medical report of Dr. Hall, [the Secretary's doctor] based upon one examination of the plaintiff. * * * Id. at 454.
It appears from the facts in many of the foregoing cases, as well as in the one before us, and we assume in those cases being held in abeyance by the trial court, that there is a widespread practice by hearing examiners of having testifying doctors accompany them, and, in a manner of speaking "ride the circuit" with them, for the purpose of examining medical records and reports of claimants and then testifying as experts, with or without a cursory examination of the claimants, as to their disability. This procedure should be frowned upon, if not eliminated altogether. Such testimony is not substantial evidence, and, if objected to, will not, standing alone, support a decision of the examiner adverse to the claimant. This is especially true when such testimony is in conflict with that of the claimant and his doctor who has not only examined him but has also treated him over a long period of time.
Mere uncorroborated hearsay or rumor does not constitute substantial evidence. Consolidated Edison Co. of New York v. National Labor Relations Board, 1938, 305 U.S. 197, 59 S. Ct. 206, 83 L. Ed. 126; National Labor Relations Board v. Amalgamated Meat Cutters, 9 Cir., 1953, 202 F.2d 671, 673.
The evidence on which the Council and Referee purported to rely is not only of "small probative value" but "in relation to the type of evidence reasonably anticipated in the circumstances of the case, that very slight proof must be characterized as unsubstantial." At most it was "handpicked fragments of evidence" merely enough to raise a "suspicion".
In our opinion there was no substantial evidence to contradict the medical opinions that plaintiff was totally and permanently disabled; neither was there any affirmative evidence that he had or could have, in view of his limited education and physical condition, engaged in any substantial gainful employment. Id. 169 F. Supp. at 244-245.
5 U.S.C. § 556(b)
20 C.F.R. 404.926,supra.
Except in unusual circumstances, and none are shown to exist in this case, this Court is reluctant to accept as substantial evidence the opinions of medical experts submitted as original evidence in the form of unsworn written reports, the admission of which would have the effect of denying to the opposition an opportunity for cross-examination. Ratliff v. Celebrezze, 338 F.2d 987, 982, 11 A.L.R.3d 1124 (6 Cir. 1964); Mullen v. Gardner, 256 F. Supp. 588 (E.D.N.Y. 1966).
Certainly, therefore, in a situation where, as here, unsworn medical reports of examining physicians are received as original evidence on the critical issue of plaintiff's physical condition, a non-examining medical expert is then allowed to "interpret" those ex parte reports, and that "interpretation" forms the basis for the decision by the hearing examiner, we have what amounts to pyramiding hearsay upon hearsay, which, under the circumstances of this case, violates the fundamental rule of fair play and cannot be permitted to stand. Id. at 1a(S) and 2a(S) of Supplemental Record.
See also Consolo v. Federal Maritime Commission, 383 U.S. 607, 619-620, 86 S. Ct. 1018, 16 L. Ed. 2d 131 (1966); Coomes v. Ribicoff, 209 F. Supp. 670, 671 (D. Kan. 1962); Sandusky v. Celebrezze, 210 F. Supp. 219, 223 (W.D. Ark. 1962); Clifton v. Celebrezze, 228 F. Supp. 251, 255 (N.D. Tex. 1964); Scott v. Celebrezze, 241 F. Supp. 733, 736 (S.D.N.Y. 1965); Farnsworth & Chambers Co. v. United States, 346 F.2d 577, 582, 171 Ct. Cl. 30, 37-38 (1965); Loral Electronics Corp. v. United States, 181 Ct. Cl. 822, 832, 387 F.2d 975, 980 (1967); Robert M. Viles, The Social Security Administration Versus The Lawyers * * * And Poor People Too, 40 Miss.L.J. 24, 36-52
The case here is to be distinguished from the case of Peters v. United States, Ct. Cl., 408 F.2d 719 [March 14, 1969], in which the writer dissented, where the court held that the alleged hearsay evidence was admissible as a declaration against interest and as an exception to the hearsay rule
See also Conn v. United States, 180 Ct. Cl. 120, 130, 376 F.2d 878, 883 (1967)