Warren E. Burger: We will hear arguments next in 74-204, Mathews against Eldridge. Mr. Solicitor General, I think you may proceed when you are ready.
Robert H. Bork: Thank you Mr. Chief Justice and may it please the Court. We are here on writ of certiorari to the Court of Appeals for the Fourth Circuit and the issue we brought up is the question of whether Social Security Disability Benefits can be terminated in a procedure which allows for the submission of evidence by the claimant, written evidence, but does not include an oral hearing. The Court below held an oral hearing was required by the Fifth Amendment’s Due Process Clause under an extension of the rational of Goldberg against Kelly. Here, the Secretary of HEW terminated respondent’s disability payments in 1972 on the basis of medical reports and respondent was given a summary of that evidence, given an opportunity to submit additional evidence and a written rebuttal. There were post-termination procedures available to him, including a full oral evidentiary hearing which I will describe in a moment, but he brought this suit instead of availing himself of those procedures, claiming a constitutional right to a pre-termination oral hearing. I have two propositions to advance. The first is a late blooming jurisdictional issue and to be candid about it, the reason it is late blooming is because our initial analysis of the application of Weinberger against Salfi decided last June to this case resulted in the conclusion which we now think erroneous, but the District Court had jurisdiction here. We proceeded for some time on that belief and it was not until work on other cases required re-thinking of the problem that we reversed ourselves and came to a contrary conclusion that Salfi’s rational precludes the District Court’s assertion of jurisdiction in this case.
Potter Stewart: I am asking you to make statements against interest, but will you sometime tell us why the basis for your original conclusion?
Robert H. Bork: Well, the basis for the original conclusion was not my own conclusion Mr. Justice Stewart, but I believe it was that the constitutional issue might be final here. I believe the thinking was that the --
Potter Stewart: You are attacking the validity of the very process under which it could proceed?
Robert H. Bork: I think that was the reasoning.
Potter Stewart: But that is the issue, it is whether or not the very process, the administrative process is a valid constitution matter --
Robert H. Bork: That is correct. But coming to the opposite conclusion, we prepared the brief on jurisdiction issue and served the typed script on respondent’s counsel a week ago and obviously they should have time to reply in a brief to our --
Potter Stewart: Now be given time?
Robert H. Bork: That is correct Mr. Justice Stewart to file a brief in response. I have really very little to add to the jurisdictional argument made in that supplemental brief. So I would to like to maybe outline it and spend most of my time if I may on the due process question where I believe there may be something to add to the brief. The jurisdictional problem is this. The relevant statute is Section 205 of the Social Security Act codified as 42 U.S.C. 405 and 205 (h) which was involved in Salfi as it is here states that no findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. Now, in Salfi, this Court concluded that 205(h) precludes the assertion of District Court jurisdiction except insofar as jurisdiction is then provided in Section 205 (g) and if we turn to 205 (g), we see that it confers jurisdiction upon District Courts to review any final decision of the secretary made after a hearing. Those provisions were not dispositive in Salfi, but they seem to be here. In Salfi, the only issue was a constitutional issue whether a categorization made by a statute was a constitutional categorization. So that it would have been as the court said futile and wasteful to require the claimant to exhaust the administrative process and it also decided, the Court also said that the secretary had decided that the reconsideration decision involved in Salfi was final. Now, neither of these grounds is present in this case. Here the secretary did not base his decision on a statutory probation or statutory categorization of eligibility which is subject to the constitutional attack, but upon a factual the termination that this respondent was in medical effect no longer disabled. And it would not have been futile and wasteful to ask this respondent to exhaust its administrative remedies which is I say would have included an oral hearing. Moreover, the secretary has not here determined that the order terminating disability benefits was final. He was entitled to administrative reconsideration, to an evidentiary hearing and so forth. He availed himself of none of this, but brought suit before the secretary had made a final decision after a hearing. Since 205 (g) does not confer jurisdiction under these circumstances, 205 (h) bars the assertion of jurisdiction by the District Court. I think there is no mere technicality. It is important to judicial administration of course that administration remedies be exhausted, even when not required by statute, and here at Congress has specifically mandated the exhaustion of administrative remedies. I should like now to turn to the merits of respondent’s constitutional claim about due process. The issue is whether he is entitled as a matter of due process to a full oral evidentiary hearing before any benefits paid to him under the disability insurance program may be stopped. The considerations to be weighed in making that decision of course are well known. They were outlined in Cafeteria Workers against McElroy and stated the number of later cases. What constitutes constitutional due process in a given context depends upon intensely practical considerations peculiar to that case and that process and the balancing of the governmental interests and the private interests that are affected. We are in effect dealing with a cost benefit judgment and so view the question becomes really how many -- the decision of this case will have a heavy impact upon the decision of how many decisional processes of government must be conform to a judicial model rather than to an administrative model. I think that is important and I think clearly there has to be stopping point somewhere to the imposition of judicial models upon the governmental decision making because it is very expensive and in some circumstances which I would contend, this is one, adds little or nothing to the alternative procedures provided. Now --
Potter Stewart: You mean expensive not only in terms of money?
Robert H. Bork: I mean expensive in terms of money expended in terms of time and indeed I think in this case --
Potter Stewart: And efficiency?
Robert H. Bork: Yes, and I supposed it is socially expensive because I think in this case for example if one were required to continue payments until an oral evidentiary hearing could be had, one would pay a lot of money to beneficiaries who claim the hearing only for the purpose of keeping the payments going and I think that imposes a social cost independent of money upon the erosion of individual character. But in this case which involves one of these massive programs with thousands -- hundreds of thousands determinations in it, I think we face something not like the ordinary hearing due process case although of course this Court has had cases similar to this before. But it is crucial here I think to understand --
William J. Brennan, Jr.: I have a question Solicitor General, was this issue before us, we did not reach it or something in similar --?
Robert H. Bork: Yes, in Richards against Wright, I believe Mr. Justice Brennan, although these are the procedures that have just been instituted prior to oral argument in Richards against Wright.
William J. Brennan, Jr.: We sent the case back for reconsideration in light of new procedures?
Robert H. Bork: That is correct. Well, I think the thought was that the claimant there might actually under the new procedures be paid and the case would be mooted by that.
Potter Stewart: And these are those new procedures?
Robert H. Bork: These are the new procedures Mr. Justice Stewart. And I think it is important to see the kinds of safeguards they provide and the kinds of results they produce. The act provides that the initial determination after a man has been qualified, a worker has been qualified for disability payments, he is told if there is any possibility of recovery from his medical disability that he will examined to see if recovery has occurred because if disability ceases, the payments cease and the Congress has mandated that state agencies were used for making the initial the termination about the cessation of disability. And the reason for that is they want to draw these workers into vocational rehabilitation therapy and training and those are primarily the state agencies that are used for this purpose. So that a state agency, working under standards and procedures laid down by the Secretary of Health, Education and Welfare requests the worker to supply information periodically on a questionnaire that shows his present condition, his medical treatment and medical restriction placed upon him and so forth. If that questionnaire does not show clear cut recovery, the state agency then obtains information from the treating physician of the claimant. It may obtain independent consulting examinations. In this case of course the initial the termination was made up of the basis of a previous medical record which was on the files. The respondent’s current answers to the questionnaire about his condition, the current report of his treating physician and the report of an independent psychiatric consultant who was called in by the agency. Now, this material when it is gathered, is then reviewed by a state agency team which consists of another physician and a trained disability examiner. If the worker is no longer disabled in their opinion after examining his record and I should say that the only issue is one in fact the medical, the statute requires that disability be proved or disapproved by medical evidence and not by other kinds of intuitions, as evidence that is well presented in other words in a written record. If they decide that that claimant is probably not disabled and they think he is not then form of that tentative conclusion, they provide him with a summary of the evidence and they provide ten days for him to respond in writing and they tell him that if he wishes additional time because of the difficulty of procuring the evidence he needs he may have it. They also tell him he can get his questions answered at the Local Social Security Office. Now here, as at all of the stages of this process, the worker is entitled to be assisted by a counsel or by any other representative that he chooses, it is often is by Union Representatives or somebody of that sort and that person is entitled to examine all the evidence in the file including the medical evidence. Respondent here declined to offer any additional evidence other than to assert that he did not have a back sprain, he actually had arthritis of the spine. Many workers do offer additional evidence and often get the initial the termination of no disability reverses. But if the tentative conclusion of the state examining team is not changed, the report is forwarded to the Social Security Administrations Bureau of Disability Insurance where it is reviewed to make sure that it is in conformity with National standards. If that office thinks that perhaps the decision should have been favorable to the work, but was not, it has no legal power to change it, but it may and does send the case back for reconsideration and I believe about half of the cases in fact for reconsideration are reconsidered favorably to the worker. If however the Social Security Administration accepts the the termination of no disability, it notifies the worker in writing, states the basis for its initial determination and specifies his right to seek further review. At that stage, benefits are terminated although there is a two-month grace period. After the month in which he ceased to be disabled, that grace period may sometimes run by them or it may still have some time to run. Respondent of course at this stage filed suit. He had a right to the following additional remedies which he did not elect to take. He can ask for a reconsideration, he gets it automatically. That means that a wholly different team of physician and examiner at the state agency review the record de novo, consider any additional evidence submitted by the worker or obtained by the state agency such as another medical examination and that decision is again sent for review to the Social security administration. There is a reversal right that is significant at the reconsideration stage. If the result is again adverse to the worker he can get an evidentiary hearing before a Social Security Administrative Judge. He may, but he need not appear personally. Social security Administration is not represented by counsel or by staff. It is not an adversary hearing.
Lewis F. Powell, Jr.: Mr. Solicitor General, you referred to the right of the worker to examine the file. I recall I believe something in the briefs to the effect that the worker himself could not see the medical evidence in the file by his counsel could?
Robert H. Bork: That is correct Mr. Justice Powell. I said that --
Lewis F. Powell, Jr.: What is the reason for that distinction?
Robert H. Bork: Well, it is a distinction in medical practice. Apparently, doctors often do not and will not show a patient his own file either because an embarrassment might result or in some cases because the doctor is not telling the patient all of the adverse news that is in that file. HEW and Social Security as I understand it are now reviewing that practice and asking themselves whether they should conform to medical practice and resolve whether they should allow the claimant as well as his representative. It does not have to be a counsel, his representative to look at the medical evidence.
Lewis F. Powell, Jr.: Is this distinction in the regulation?
Robert H. Bork: I believe it is Mr. Justice Powell, but I cannot look at -- I believe it is in the regulation.
Lewis F. Powell, Jr.: And this means that a claimant who does not have counsel does not have access to that medical information?
Robert H. Bork: Well, Mr. Justice Powell a claimant who cannot get anybody to represent him, that is it could be a relative, it could be a union representative, it could be any representative he chooses.
Lewis F. Powell, Jr.: His wife?
Robert H. Bork: Yes sir. As far as I know it cannot be. If I am wrong in the statement I will correct it.
Warren E. Burger: Mr. Solicitor General, does this not cut across rather fundamental proposition that the lawyer may not perceive information on terms that it cannot be transmitted to its client?
Robert H. Bork: Well, I have operated under protective orders. I think Mr. Chief Justice that I have operated under protective orders occasionally that prevented me from --
Warren E. Burger: Protective orders, are you equating the regulation to a protective order?
Robert H. Bork: It is in the sense Mr. Chief Justice that I think under current medical practice, the agency would have some difficulty perhaps getting medical reports if doctors prefer or insist upon limiting access to their medical files. Now here, the claimant gets a summary of the medical evidence on what it shows. The raw file is available to any representative that he chooses and HEW is looking at and experimenting as I understand it with the possibility of opening the raw files to the claimant as well. But as the matters stand now, he may not look at it.
Byron R. White: (Inaudible) He can present whatever evidence he wants I suppose, but he apparently is not entitled to have any witnesses against him appear personally?
Robert H. Bork: Although regulation says I believe that he is entitled to subpoena and examination.
Byron R. White: But the government need not put its case on --
Robert H. Bork: The government puts on no case at the --
Byron R. White: They just -- they got the file and that is it?
Robert H. Bork: The file goes in and the administrative law judge is there, but the government is not --
Byron R. White: May the claimants subpoena the doctors and cross-examine them?
Robert H. Bork: As I understand it, he may. As I understand the regulations about it. If I am wrong, I am sure I will be corrected and I will stand corrected likewise. The regulation say as I understand he is entitled to subpoena and is entitled to witnesses.
Byron R. White: And he can call them for cross-examination or what --?
Robert H. Bork: That is what I understood. I hear some science of dissents at the counsel table here, but that was my understanding of the process.
Byron R. White: Do you think that the validity of the procedures at that hearing are at stake here?
Robert H. Bork: No, they are not Mr. Chief Justice -- Mr. Justice White because they are --
Byron R. White: I thought it was just where there needed to be a pre-hearing a prior --?
Robert H. Bork: The only question here is whether there should be an oral evidentiary hearing prior to termination and the post-termination hearing that was given in this case is not challenged.
Byron R. White: Well, it is not an issue here?
Robert H. Bork: No, it is not.
Byron R. White: Except as it may bear on whether it is any kind of a reliable substitute for a pre-hearing or prior hearing?
Robert H. Bork: Well, it results as respondent’s counsel will tell you at a very high rate of reversal of those cases taken to it. So that it appears to be making real judgments. Of course a very few cases are taken that far because most of these determinations are accepted.
William H. Rehnquist: I thought this respondent did not have a post-termination hearing?
Robert H. Bork: He did not. He came straight to Court after the initial determination. But I just thought it was important to point out what this process offers and it should be said that it does offer an impartial tribunal, it offers a chance to submit evidence. It offers decisions wholly on the record. It offers the kinds of benefits that were noted in Richardson against Perales that if we have independent and unbiased physicians here, these are not government physicians. One of them is the respondent’s physician. We have a very vast system with thousands and hundreds of thousands of determinations so that that makes for impartiality. The agency does not operate as an adversary at any stage in this process. It operates only as an adjudicator. So, the due process question I think then comes down as looking at this entire rather elaborate procedures available, the safeguards at every step, what would be gained by moving an evidentiary hearing up before the initial termination decision and what would be lost? I think very little would be gained and I think a very great deal would be lost. The issue was medical condition which is not an issue that an administrative law judge gets a great deal of information about by looking at a man in a room, even the demand comes he need not. And indeed, the decision cannot rest upon the administrative law judges to look at the man and feeling about his condition. It has to rest upon medical evidence so that the probate of evidence here is the kind that can be in writing and can be challenged in writing. And he not only has his own doctor, his treating physician and any consulting doctor that Social Security has asked for, the state agency has asked for. He gets a doctor who reviews the record at initial the termination period. Now, I think there is no significant likelihood that any claim is going to be damaged significantly by the timing of the hearing. I have been looking at these briefs and it seems to me, all of the briefs are a little unrealistic about what the reversal rate is in these cases. Our brief suggests that the error rate in the initial determination is 12.2% measured against what happens later. But I think it is really more realistic to look at this process at the reconsideration stage because a worker is terminated and can get reconsideration rather quickly and any impact he may feel is really almost de minimis at that stage and in addition to that, the reconsideration stage is the same kind of a paper record determination that occurs at initial determination stage so that the reversal rights from thereon to the oral argument, I think to the oral hearing is the relevant one. And if you look at that reversal rate, there are 1,101 workers who succeeded at the oral hearing, having lost at the initial stage out of about 35,000 termination decisions. So that we have an oral hearing that cured mistakes at a 3.3 reversal rate and if you measure that against all determinations concerning disability made in the system that year, about 150,000, you get a harmful error rate of 7/10 of 1%. Now, the worker who receives, who wins at the oral evidentiary hearing or indeed the reconsideration, but the worker who wins the oral evidentiary hearing stage receives all his back payments. Now, it will be nice to say I suppose that the system must be perfect. Nobody must ever be terminated no matter how temporarily. But indeed, I do not think any legal process or any chemical process or any industrial process ever can afford to remove the last bit of impurities in that process against the extraordinary expensive, indeed up against the defeat, the end of the process. I cannot put for approximate dollar cost on both sides of this due process equation and I think that is not exactly an inhuman thing to do because these claimants are not in the position of the welfare recipients in Goldberg against Kelly. This program is not based upon need. It maybe alternate forms of income in the family or to the worker and in addition if there is a worker who loses his disability temporarily, he has available state, local and other forms of welfare. So that we are not -- that puts a floor under his income, so we are not dealing with the kind of stark human suffering that was perceived to be the alternative in Goldberg against Kelly. And that means that in this case, I think the dollar amounts are real proxy for the interest that go into the due process balance. As I said, 11,101 workers, one reversal at the evidentiary hearing in calendar '73. Now, our brief is a little misleading, but the appendix is much clear. It apparently takes 10 to 11 months to get an oral evidentiary hearing after the initial termination and part of that time -- part of that average time is clear on page 12(a) of the appendix to our brief, is waiting for the worker to asked for an oral evidentiary hearing since he has about six months to do so, but it is 163 days as the median time from request for an oral hearing to decision. But if we take say 11 months which appears to be roughly as the period of time that worker might be without payments and there are 11,101 workers, it turns out that, since we are dealing with the stream of payments so that only half of the payments are outstanding, that is the full amount he ultimately would be due is not outstanding all the time. It turns out that there must have been total payments withheld during 1973 that were later said to be due to workers $2,028,000.00 or an average of $1,842.00 per claimant. Now, these workers recapture that money at the end of the period so that they did not lose it. What they did lose was the use of the money and as I say I think it means something to talk about that because these people do have alternative welfare systems or systems that deal with the needy or often their forms of income, they lost the use of the money and that 8% interest on that stream of monthly payments means that for all claimants in that year about $162,000 or $147.00 per worker was lost. Now, you have to measure that of course against a cost to the government. HEW estimates that putting in full evidentiary hearings, including the loss of $23 million in -- the estimated loss of $23 million in over payments that cannot be covered, some of them maybe recovered and they estimate the total cost of the administrative machinery of bureaucracy and the lost payments to be between $15 and $25 million annually at current rates. If we take that, take the median figure there of $20 million cost annually, in order to save benefits to workers of a 163,000, we have a trade off in costs of 122 to one which does not seem to me to be terribly good trade off and it may be low because it does not really take account I think of the full scope of the incentive to ask for evidentiary hearing to keep the benefits flowing. But I think it does not make a great deal of sense in due process terms which is an intensely practical subject to spend a $122.00 which could have gone to other recipients to save $1.00 to that occasional deserving beneficiary.
Warren E. Burger: Does the secretary made any studies in terms of manpower? You have given us a dollar figure, but --
Robert H. Bork: Our brief contains an appendix which estimates what would have to be done in terms of manpower. I think what would have to be done actually is to create for the first time hearing procedures either in the state agencies or in the local Social Security Offices which would mean an extraordinary proliferation of administrative law judges and an extraordinary call upon doctor’s time to testify at these hearings, and doctors being a scarce resource I think is part of the equation that we have not measured in dollar terms, but it is a real part, but that in detail I think is found in the appendices here Mr. Chief Justice and how they make their estimate.
Byron R. White: Mr. Solicitor General, supposed the administrative remedies are completely exhausted then I suppose at some point there is judicial review?
Robert H. Bork: After that the judicial review which is the first review which is not de novo.
Byron R. White: But now that is on the record?
Robert H. Bork: That is on the record.
Byron R. White: So that it is true that -- it is true that -- you think however that if he wants to he can have a -- he can test out the strength of the government’s case through live witnesses?
Robert H. Bork: Yes, I believe I do Mr. Justice White and if I am --
Byron R. White: Well, let as assume he could not, assume he could not?
Robert H. Bork: You mean at the --
Byron R. White: Oral hearing, yes.
Robert H. Bork: The administrative oral hearing?
Byron R. White: Yes, the administrative oral hearing and whatever record is to be made is made there and now let us just assume he cannot test up the government’s case by confrontation of the government’s witnesses or the sources of the government’s information, assume he cannot do that, neither can he do it in any later time. In court, the court is limited to the record this may --
Robert H. Bork: The Court is limited by the substantial evidence rule.
Byron R. White: I see.
Robert H. Bork: But I think in no previous due process case that I know of has there been this kind of a ratio of cost benefit, in fact this kind of a disaster’s ratio of cost benefit.
Byron R. White: That argument -- that argument is (Inaudible)
Robert H. Bork: That is correct, but I am only asking that there not be a pre-termination here Mr. Justice White. But in any event for the jurisdictional reason, I think it is proper for the case to be -- the judgment to be vacated and the case remanded with instructions to dismiss or in the alternative if the due process grounds are reached, we ask that the judgment below be reversed.
Warren E. Burger: Thank you Mr. Solicitor General. Mr. Earls?
Donald E. Earls: Mr. Chief Justice and may it please the Court. I wish to basically go with the facts that I do not think Mr. Bork brought out in detail on George Eldridge. First of all, Mr. Eldridge did go through the full administrative processes --
William J. Brennan, Jr.: May I ask that while you address the jurisdictional question that the Solicitor General raised in oral argument, are you –-
Donald E. Earls: Mr. Justice Brennan I can, I am familiar with the Salfi case, I have rated. Although we receive the government’s final brief less than 48 hours ago --
William J. Brennan, Jr.: But there will be question to it if you want time to address them in the brief.
Donald E. Earls: We feel as far as jurisdiction --
Warren E. Burger: (Inaudible) file independently.
Donald E. Earls: Yes sir. To briefly hit the jurisdiction question, we do not feel that the Salfi case is applicable in our Eldridge case. The reasons we feel is as follows. In Salfi, Mrs. Salfi was trying to get a determination that she was entitled to benefits through the District Court. In Eldridge we are not concerned with determination as to whether or not George Eldridge is entitled to benefit. Judge Turk in his District Court opinion and the government in their brief admit that this is not a case determining whether or not George Eldridge is entitled to benefits. Certainly, that is distinguishable from the Salfi case and as far as I –-
William H. Rehnquist: Salfi as I recall said that actions brought for benefits under the Social Security Act arrive could only be brought under that particular jurisdictional section.
Donald E. Earls: Mt. Justice Rehnquist, this is not, the District Judge in his first sentence points out that this is not a case for benefits. The government in their own briefs have said this is not a case for benefits, we are not here under 405.
William H. Rehnquist: But this man would never be in Court if you were not asserting some claim to a benefit under the Social Security Act, would he?
Donald E. Earls: Your Honor, could you repeat the question please?
William H. Rehnquist: This man would not be in Court if you were not asserting some claim to a benefit under Social Security Act?
Donald E. Earls: Mr. Justice Rehnquist, we had -- Mr. George Eldridge had benefits under the Social Security.
William H. Rehnquist: Okay, did you get my question?
Donald E. Earls: He is claiming benefits under the Social Security Act, yes sir.
William H. Rehnquist: Yes and the statute that we construed in Salfi said that if you were claiming benefits under the Social Security Act, you bring your action under 205 (g) and not otherwise, does it not?
Donald E. Earls: Mr. Justice Rehnquist, that is what Salfi hailed. However, in the facts in this particular case, in the George Eldridge case, we are challenging the procedural regulations of the Secretary. We are not asking that benefits be awarded. We are challenging merely the procedure of the secretary not as to whether or not George Eldridge should draw benefits.
Speaker: (Inaudible)
Donald E. Earls: Your Honor, we did go out in the administrative process. The facts basically that maybe should be brought out is that initially --
Speaker: (Inaudible)
Donald E. Earls: No sir, it is not moot.
Speaker: You have one (inaudible) benefits?
Donald E. Earls: No sir, we are drawing benefits.
Speaker: Is there an order, a termination order outstanding?
Donald E. Earls: Sir?
Speaker: Is there a termination order outstanding?
Donald E. Earls: Yes sir.
Speaker: (Inaudible) you are drawing benefits or the termination order outstanding?
Donald E. Earls: Your Honor, I do not understand what you mean be termination order. You mean from the secretary?
Speaker: What is your dispute with the government now?
Donald E. Earls: It is the procedure --
Speaker: Well, I know but what you dispute about benefits?
Donald E. Earls: All right, the issue in this case is whether or not a disability recipient should be given an evidentiary hearing prior to terminating the benefits.
Speaker: (Inaudible) Do you not have some case about termination of benefits?
Donald E. Earls: Yes, we do.
Byron R. White: What is it? What is your (inaudible)? Have they terminated you or not?
Donald E. Earls: The secretary did terminate Mr. Eldridge’s benefits. The District Court reinstated his benefits until such time as he was afforded an evidentiary hearing Mr. Justice White.
Speaker: Then the government challenges the District Court’s order?
Donald E. Earls: The government challenges District Court order.
Speaker: Have you lost out of the administrative process? You lost out before the secretary. He terminated you, did he not?
Donald E. Earls: Yes, that is correct.
Speaker: And then the District Court reinstated your benefit?
Donald E. Earls: That is correct.
Speaker: And the government is now here challenging the District Court order reinstating those benefits, is it not?
Donald E. Earls: Challenging the District Court order and the Fourth Circuit Court of Appeal order upholding the District Court.
Speaker: (Inaudible) exhausted --
Donald E. Earls: Your Honor, what we are --
Byron R. White: (Inaudible) and you have divided work?
Donald E. Earls: That is the Government’s argument Mr. Justice White. Our contention is this, that by being terminated -- by our benefits being terminated prior to being afforded in evidentiary hearing, we were denied due process. We went twice with Mr. Eldridge, factually speaking, went twice through an administrative hearing. There is not the great revamp of the Social Security System as outlined by the government in their brief. They afford an oral evidentiary hearing after a reconsideration determination. All we are asking is that the oral evidentiary hearing be moved up. In other words that the individual receive his benefits --
William J. Brennan, Jr.: Well, what date were you terminated?
Donald E. Earls: We have been terminated twice.
William J. Brennan, Jr.: Well, the first time?
Donald E. Earls: The first time we were terminated on June 26 --
William J. Brennan, Jr.: Whatever the year.
Donald E. Earls: The first time is February 18, 1971 when we were first terminated.
William J. Brennan, Jr.: Then what is the rule about that term?
Donald E. Earls: After that we requested a reconsideration.
William J. Brennan, Jr.: Before the administrative process?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: And what kind of reconsideration did you get?
Donald E. Earls: It was unfavorable.
William J. Brennan, Jr.: I know, but what was the nature of it? What was on paper?
Donald E. Earls: It is a paper thing, they review the medical evidence.
William J. Brennan, Jr.: And did you object to that form of reconsideration?
Donald E. Earls: No, we did not.
William J. Brennan, Jr.: Alright. Then next what happened?
Donald E. Earls: Next we went to an oral evidentiary hearing before an administrative law judge at that time they were called hearing examiners. The hearing examiner gave us a final, favorable --
William J. Brennan, Jr.: I know, but what was the nature of the hearing with the witnesses and cross-examination and all that?
Donald E. Earls: No, that is not true.
William J. Brennan, Jr.: Well, what did happen?
Donald E. Earls: That is the first time at the evidentiary hearing is where the claimant and his attorney may sit down at a table and look at the medical evidence which the secretary has concerning the --
William J. Brennan, Jr.: But the secretary produced no witnesses?
Donald E. Earls: No sir.
William J. Brennan, Jr.: Did you ask that he produce witnesses?
Donald E. Earls: No sir. Practically speaking, we do not cross-examine medical doctors at these evidentiary hearings. This is the time --
William J. Brennan, Jr.: Did you win on that --
Donald E. Earls: Yes, we did. This is where the claimant, his neighbors, his wife can come in and subjectively tell what is wrong.
William J. Brennan, Jr.: I know, but you won?
Donald E. Earls: Yes, we won.
William J. Brennan, Jr.: And you got back payments --
Donald E. Earls: Yes, we did Your Honor.
William J. Brennan, Jr.: Then next what happened?
Donald E. Earls: Then next, the secretary sends a termination letter to Mr. Eldridge advising him that they had determined that he is no longer entitled to disability benefits.
William J. Brennan, Jr.: And when you got, what did you do?
Donald E. Earls: We then requested reconsideration.
William J. Brennan, Jr.: And then what happened?
Donald E. Earls: The secretary’s holding was upheld. I would like to point out that the secretary in their --
William J. Brennan, Jr.: Then did you get an oral hearing?
Donald E. Earls: Yes, we did Your Honor.
William J. Brennan, Jr.: And what happened after that?
Donald E. Earls: We were awarded benefits.
Speaker: You won twice, so that is the second time you were on oral hearing?
Donald E. Earls: That is correct.
William J. Brennan, Jr.: And you got the back disability payment?
Donald E. Earls: That is true. Well, in the meantime before our second hearing, the District Judge issued a writ of mandamus requiring the secretary to continue payments until we received that hearing.
William J. Brennan, Jr.: Well I know --
Donald E. Earls: We have two—
William J. Brennan, Jr.: Whatever it was, the secretary himself after the second oral hearing, reinstated your disability benefits, did he?
Donald E. Earls: That is correct. Yes sir.
William J. Brennan, Jr.: Well, then what happened?
Donald E. Earls: Alright. Then, after one year, again Mr. Eldridge receives a termination letter from the secretary advising him that they have determined that he is no longer entitled to disability benefits.
William J. Brennan, Jr.: And then what did you do?
Donald E. Earls: We filed suit in the District Court --
William J. Brennan, Jr.: You did not ask for reconsideration?
Donald E. Earls: Yes, we did Your Honor.
William J. Brennan, Jr.: And what happened to that?
Donald E. Earls: The government if you will notice on the government’s appendix in the Fourth Circuit brief for the Appellant in the Fourth Circuit informed us that they determined that Judge Turk’s order to be final and appealable and the government appealed and we have not been reconsidered. We have not been offered an oral evidentiary hearing.
William J. Brennan, Jr.: Did you asked for it?
Donald E. Earls: We cannot ask for a hearing until after we have had reconsideration.
William J. Brennan, Jr.: I see that because meanwhile you filed the suit?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: And as I understand that you filed suit you got an order from Judge Turk?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: The government appealed that order?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: And did this obligate you asking for reconsideration, the fact that the government appealed that order?
Donald E. Earls: We had already asked for reconsideration. The secretary did nothing.
William J. Brennan, Jr.: Did nothing because the government had appealed Judge Turk’s order?
Donald E. Earls: I do not know why they did not. They just did not act upon our request. Now, I think George Eldridge case points out the fairness of the oral evidentiary hearings. The government would have us believe that many practically speaking --
William J. Brennan, Jr.: You filed suit actually before the second reconsideration?
Donald E. Earls: Yes sir we did.
William J. Brennan, Jr.: Before the second?
Donald E. Earls: Yes sir.
Speaker: That is in this case?
Donald E. Earls: No sir.
Speaker: That is another case and then filed this case after the third termination?
Donald E. Earls: Yes sir.
Speaker: But before reconsideration?
Donald E. Earls: The government reconsiders. We do not reconsider. We requested reconsideration.
Speaker: When you filed reconsideration, you filed suit?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: And you never got reconsideration?
Donald E. Earls: We were never given --
Speaker: After you filed suit?
Donald E. Earls: That is correct.
William J. Brennan, Jr.: Was that the reason you did not get reconsideration because the suit was filed?
Donald E. Earls: The secretary has never told us why Mr. Justice Brennan.
Thurgood Marshall: On this third one, I thought you said you asked for reconsideration before you went to court?
Donald E. Earls: Now, we requested reconsideration.
Thurgood Marshall: You requested before you went to Court?
Donald E. Earls: That is correct Your Honor. And they appealed as on page 16(a) of their appendix in the Fourth Circuit is the letter advising me that they are appealing that they consider Judge Turk’s order final and appealable.
William J. Brennan, Jr.: Precisely what order of Judge Turk did they advice you they thought was?
Donald E. Earls: Judge Turk issued an order requiring the secretary to continue disability benefits to George Eldridge until after he had been afforded an evidentiary hearing under the standards of Goldberg versus Kelly.
William J. Brennan, Jr.: This on the ground that procedures did not satisfy the standards of Goldberg?
Donald E. Earls: Well, twice when George Eldridge met before an individual rather through the mails, twice he was given benefits by the secretary’s own representative that is a hearing before -- when he had his oral evidentiary hearing before an administrative law judge or hearing examiner. Judge Turk had no problem at all awarding him benefits until he had received an oral evidentiary hearing. And I think these points out the unfairness of terminating the benefits prior to an oral evidentiary hearing. In this particular case, George Eldridge had his home foreclosed. He and his six children were sleeping in one bed because all of their furniture had been repossessed and yet the secretary says, in his argument today that there is some delay of 160 days from request for hearing until termination. By their own figures, in their reply and supplemental brief, on page 14, their figures show that indeed roughly 58%, 58.6% of those cases that go before -- that have an evidentiary hearing are reversed. That means that there are 58.6 individuals who are entitled to disability benefits who have their disability benefits terminated wrongfully. Figure-wise this is 1100. So doing a little subtraction, we have approximately 600 people drawing benefits that should not. Our main contention is that the evidentiary hearings should be moved up before benefits are terminated.
Byron R. White: Did you say -- let us assume that the present evidentiary hearing that is supported after reconsideration were moved up, would that satisfy you?
Donald E. Earls: Yes sir it would.
Byron R. White: You mean --
Donald E. Earls: It would not change anything at all. They already allow --
Byron R. White: -- you mean the content and the opportunity available in the present evidentiary hearing is you think adequate?
Donald E. Earls: Mr. Justice White, the figures the secretary gives you, yes sir, absolutely.
William J. Brennan, Jr.: Well let me see what that means?
Donald E. Earls: It is timing.
William J. Brennan, Jr.: That means as you described it, that is an oral hearing at which the --
Donald E. Earls: The claimant is present.
William J. Brennan, Jr.: The claimant and his lawyer?
Donald E. Earls: Possibly, his lawyer or a neighbor.
William J. Brennan, Jr.: Well, you said I think earlier that this claimant had lawyer --
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: -- but you would be satisfied if it were a neighbor or union representative or something like that?
Donald E. Earls: Anyone he wants to tell you?
William J. Brennan, Jr.: Now, are you satisfied just to look at the medical reports rather than have the doctors there to be cross-examined?
Donald E. Earls: Your Honor in the case of Underwood versus Redicle, the Fourth Circuit has hailed that main element in determining benefits is not the objective co-medical record as a secretary sees, but they say that subject if evidence such as the claimant's appearance before the administrative law judge and the testimony of the claimant, his wife, and neighbors as to his ability to work and in many of this cases and George Eldridge is a very good example, you can look at him and tell he is disabled.
William J. Brennan, Jr.: Well, you have not asked me whether you insist on having the doctors present?
Donald E. Earls: No, Your Honor we did not insist upon having the doctors present, but I do want to point out that --
William J. Brennan, Jr.: Well, I just want to get what you said. You are satisfied to have the claimant there?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: His lawyer if he wants?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: You are satisfied in a neighbor and members of the family --
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: -- to testify as to what it can do --
Donald E. Earls: And the medical records that are used against him.
William J. Brennan, Jr.: -- and the medical records that are used?
Donald E. Earls: Or form?
William J. Brennan, Jr.: Only the medical records?
Donald E. Earls: Yes sir.
William J. Brennan, Jr.: And without the doctor personally present?
Donald E. Earls: There would be no need in having the doctors there.
Byron R. White: Well you have the power of subpoena?
Donald E. Earls: That is not really the issue here.
Byron R. White: I know but do you or not?
Donald E. Earls: By way of cross-examination to medical doctors, if you start subpoenaing doctors, you can never get one to examine a disability claimant. I mean, there is not enough money in the program for it. If a doctor is -- If you do feel a doctor is antagonistic he could --
Byron R. White: I know, but I just ask you whether you have the power of subpoena to require a doctor who has written one of these reports to attend the hearing?
Donald E. Earls: Yes sir, I believe you do, practically speaking I have never --
Byron R. White: Well I know, but legally speaking, you have the power to call witnesses?
Donald E. Earls: Yes, you do.
Byron R. White: So if you are not satisfied with the record before you, you can call the doctor?
Donald E. Earls: At the oral evidentiary hearing is the first time that you can see the record --
Byron R. White: So the answer is yes?
Donald E. Earls: My answer is yes.
Harry A. Blackmun: Mr. Earl, you are not saying that a co-medical record as you described it is totally objective and does not include subjective aspects, are you?
Donald E. Earls: Mr. Justice Blackmun, I think the statistics that the secretary provided to you point out that the co-medical record is in error 58% of the time. In other words --
Harry A. Blackmun: Let me take that for me --
Donald E. Earls: In other words according --
Harry A. Blackmun: According to their diagnosis, 58% are wrong?
Donald E. Earls: According to their records, after an initial determination is made, that is accepted by 24,800, roughly 25,000 of the persons who had been drawing disability payments and are cut off. So it is accepted roughly by 25,000 people and this is explainable. You have 25,000 people who are involved in industrial accidents and for some reason or another are drawing disability benefits. When they recover or when they are able to go back to work then, they certainly would not contest that they may now be gainfully employed and should be terminated. Of these, then you have 8,700 remaining who may request reconsideration. Of those that do, 5,700 except the unfavorable the termination after reconsideration, that leaves 1,100 people for hearing, I am sorry 1,800 people for hearing and of those 1,100 went out after the hearing.
William H. Rehnquist: Would you compare 1,100 with the total number rather than with the 1,800?
Donald E. Earls: Because --
William H. Rehnquist: Presumably the ones most having the strongest cases are the ones that are going to the hearing. The ones with the least substantial plans are going to accept the adverse determination?
Donald E. Earls: We have 25,000 people who realize that they are no longer disabled and do not contest the determination.
William H. Rehnquist: But that itself is a medical the termination, is it not?
Donald E. Earls: No sir.
Speaker: (Inaudible)
Donald E. Earls: No sir because you can also terminate benefits based upon the work record. If an individual returns to work, then of course these disability benefits will cease. He may call up to the District Office and say I am going back to work. I do not want your benefits.
William H. Rehnquist: Is there anyway of knowing in the case of these 25,000 that accept the initial determination whether the basis for the determination was medical records or return to work?
Donald E. Earls: Possibly the secretary could provide that. I do not have those figures available.
William H. Rehnquist: (Inaudible)
Donald E. Earls: Realistically speaking, I would say that it would be such as industrial accidents, recovery from injuries and this sort of thing.
William H. Rehnquist: But there is nothing in this record that permits any breakdown?
Donald E. Earls: No, Your Honor there is none. But we do want to point out that George Eldridge twice went through the adversarial hearing and was twice awarded benefits after this. We are not asking for any great reshuffling, any hiring. What we are asking is that the hearing which has afforded him be moved up prior to the termination of benefits. We do not think that this is unreasonable burden and certainly 58% of the time, what we are doing we are sacrificing 58% of the people that are entitled to the benefits, to the 42% that are not. The secretary has said that disability benefits are not based upon need. The statement was made from the stand today. I would like to point out on page 28 of the government’s petition for writ of certiorari, their first sentence in the secretary’s manual states that most people who get a social security check, depend on it for the necessities of life and this is certainly the case in George Eldridge here, an individual who has paid into a system such as Social Security must forfeit in many jurisdictions or at least submit to a lien for any welfare benefits which he may draw and --
William H. Rehnquist: Well, this manual covers old age pension, survivor’s benefit, as well as disability benefit, does it not?
Donald E. Earls: Mr. Justice Rehnquist, I think it does.
William H. Rehnquist: Then I take that the statement is a general one presumably referring to all aspects of the Social Security Program?
Donald E. Earls: Well, the secretary’s figures point out that 90% of the total beneficiary population earn nothing. So, I would say that as opposed to need -- as opposed to Goldberg versus Kelly in need, they are indistinguishable. I feel in the George Eldridge case where Mr. Eldridge was required to sleep in one bed with five children lost his home that he had worked all his life for as a labor on a railroad and then as a soda distributor, driving a truck in carrying cases of soda pop, then certainly, he lost everything which could not be recouped after the -- in other words, he cannot go buy his house back once it has been foreclosed and this is what happened in the George Eldridge case and this is what happens in many of the cases. In 58% of the cases, it may happen because in 58% of the cases that go to hearing, they are reversed.
Harry A. Blackmun: I take that you are saying that the house would not have been foreclosed had there not been termination?
Donald E. Earls: That is true, yes sir. He would have had some money.
Harry A. Blackmun: Well, would he have enough money?
Donald E. Earls: No sir, he would not have enough money, enough income of any kind --
Harry A. Blackmun: Thus, it would have been foreclosed in any event?
Donald E. Earls: That is correct Mr. Justice Blackmun.
Harry A. Blackmun: Then why are you arguing?
William H. Rehnquist: What is the point of the argument?
Donald E. Earls: My point is, if he had been continued on benefits prior to terminating, those benefit payments would have kept his house payments up.
Speaker: (Inaudible)
Donald E. Earls: Perhaps I misunderstood your question, I am sorry.
Harry A. Blackmun: My question is that, would he have lost his house had the benefits not been terminated?
Donald E. Earls: No sir, he would not have. He would have had money to make house payments.
Harry A. Blackmun: So that the termination was the difference between keeping his house and not keeping it?
Donald E. Earls: That is correct.
Harry A. Blackmun: Does this record show that?
Donald E. Earls: The record in the District Court or the transcript of the record of the District Court should show it. Yes sir.
Warren E. Burger: Any findings on that subject?
Donald E. Earls: As to need?
Warren E. Burger: No, any findings on the issue you are talking about now?
Donald E. Earls: We were not pursuing the issue as to whether or not Mr. Eldridge is entitled to benefits in the District Court. We were merely challenging the procedures employed by the secretary and I would point out that the reversal rates now after hearing are greater than those reversal rights prior to the decision in Wright versus Richardson. In the --
Warren E. Burger: We will resume there after lunch. You have about five minutes.[Recess]
Warren E. Burger: Mr. Earls, you have five minutes left.
Donald E. Earls: Thank you, Your Honor. Mr. Chief Justice and may it please the Court. I would like to point out that the reason we are here is that the District Court held that it was a violation of George Eldridge’s due process rights to terminate his benefits, his disability benefits prior to an evidentiary hearing. The District Judge Turk was upheld by the Fourth Circuit Court of Appeals. The government chose to appeal it and to apply for a certiorari to this Court and that is why we are here. We do not question the constitutionality of any hearings. We are just saying that the money should not stop prior to an evidentiary hearing. If there are no further questions, that concludes Mr. Eldridge's arguments.
Potter Stewart: Mr. Earls until the end of last week when the government filed its supplementary brief you had no reason to know that there will be no jurisdictional question in this case as I understand it?
Donald E. Earls: Mr. Justice Stewart that is correct.
Potter Stewart: And I for one would be interested in a written brief from you on that issue that the government has belatedly brought up.
Donald E. Earls: I would be happy to do so and I would like approximately ten days to prepare one.
Warren E. Burger: But you recall that right this morning, you may file one in ten days. If you want fifteen, you may have it.
Donald E. Earls: Alright sir. Thank you very much.
Warren E. Burger: Very well, thank you gentlemen. The case is submitted.


Earl Warren: Number 94, National Labor Relations Board, versus Florida Citrus Canners case. Mr. Come.
Norton J. Come: May it please the Court. This case is likewise here on certiorari to the Fifth Circuit and presents an issue similar to that in Walton, the higher case, namely whether the court has grossly exceeded its reviewing power and setting aside for the findings of fact in an unfair labor practice case. Here, the Board found that the respondent unlawfully refused to bargain with the Teamsters, the certified bargaining agent of its employees, that this unfair labor practice was the cause of a strike which in ensued so that 274 strikers were entitled to be returned to their jobs with back pay, notwithstanding intervening replacement, and that respondent engaged in various acts of interference to restrain in addition in the violation of Section 8 (a) (1) of the Act. The court below set aside the refusal to bargain findings which in turn upset the finding that the strike was an unfair labor practice strike because in its view, the trial examiner's credibility determinations could not be accepted and then it proceeded to reevaluate and minimize the 8 (a) (1) Act cavity and then decided not even to enforce that part of the Board's order. Now, in Walton, we attempted to show that the court below erred in rejecting inferences drawn by the Board though on the entire record, they had rational support. Here, we submit, the Court has made an even more basic incursion into the Board's fact finding function by setting aside terminations as to the credibility of witnesses which were neither irrational nor contrary to the view of the court below based on an improper standard. The facts can be briefly set forth as follows. The union was certified in February of 1957, and bargaining negotiations were carried on sporadically from April through November, but the parties were unable to reach an agreement. On December 4, Union Negotiator, Wingate and Production Manager, Stephenson, after a private off the record meeting, appeared to be not far apart on the union's latest proposal and another formal negotiating session was set for December 18th. Now, that is a critical date because the Board finds a refusal to bargain on and after that date. At the off the record meeting with Stephenson on December 4th, they agreed to set up a resumed negotiations on December 18th. On December 12th and 13th, the Florida Citrus belt was hit by a severe freeze. At December 18, the meeting opens and Union Organizer, Wingate, asked for the company's views on the union's latest proposals, which as I've indicated, appeared to be acceptable to Stephenson. The company attorney said that there was no point in discussing them since they were completely different from anything that have ever been discussed up to then and besides the company wanted to talk about the effects of the freeze. Wingate thereupon accused the company of strolling and threatened a strike. The company representatives at that point terminated the meeting, indicating that they would not respond to the pressure of the strike and it might do the employee some good to get it out of their system. Despite frequent requests by the union, there was no further meeting until January 28, 1958. The parties got together after a short meeting that broke up with the company indicating that it would get in touch with the union for further meetings. No further word was received from the company and no future meeting was selected. In the meantime, a decertification petition was circulated in the plant. The company allowed the employees to circulate it on company time. Majority of the employee signed it, repudiating the union. As soon as the company receives that they tell the union that they will no longer bargain with them because the union has lost its majority. Now, the Board found that on and after December 18, 1957, the company refused to bargain in good faith with the union. That what it was doing was exploiting the emergency created by the freeze in this Florida Citrus belt as an excuse for delaying negotiations while in the meantime, it was carrying on a course of conduct which I will elude to later for the purpose of undermining the support for the union so that when February 8 came around which was the end of the certification year, the company could withdraw recognition from the union. Now, to support this finding that there was bad faith between bargaining and a consorted effort to undermine the union on and after December 18th, 1957. This finding is supported basically on the testimony of the employee Holly and Union Organizer, Wingate whom the Board and the trial examiner credited. These credibility findings, the court below upset and that is the nub of this case. We submit that that Court was unjustified in setting aside those credibility findings. It implied, and indeed, in doing so, it exceeded its reviewing power under Section 10 (e) of the Act because they were based on reasonable considerations. They were well within the examiner's province as the presiding officer at the hearing and the bias that the Court attributed to the examiner was based upon statements in his intermediate report which we submit do not reasonably have the significance that the Court attributed to them. Now, as to Holly, because he is the key, one of the key witnesses here.
Potter Stewart: Is Holly the employee or the organizer?
Norton J. Come: Holly was the employee. He was an old time employee who had been active in the administration of the former union which had previously represented the employees before the Teamsters came on the scene. I'll continue tomorrow.