Opinion ID: 7030
Heading Depth: 1
Heading Rank: 3

Heading: the stieberger settlement

Text: Appellant's first argument is that he was denied due process because the Secretary has treated him differently than similarly situated residents of New York. This disparity in treatment allegedly arose as a result of the Secretary's settlement of Stieberger v. Sullivan.6 In compromise of the Stieberger litigation, the Secretary agreed to reopen and review de novo the previously denied applications for Social Security benefits of a class defined as: All New York residents whose claims for benefits or continuation of benefits have been, or will be denied or terminated since October 1, 1981, based on a determination that they do not have a disability that prevents them from 6 The district court's decisions on motions for summary judgment in this matter are reported at 615 F.Supp. 1315 (S.D.N.Y.1985) and 738 F.Supp. 716 (S.D.N.Y.1990). The settlement agreement at issue is reported at 792 F.Supp. 1376 (S.D.N.Y.1992) and modified in part at 801 F.Supp. 1079 (S.D.N.Y.1992). 5 engaging in substantial gainful activity and whose benefits have not been granted or restored through subsequent appeals. Stieberger, 792 F.Supp. at 1377. Appellant alleges, and Appellee conceded at oral argument, that Torres satisfies all of the criteria for class membership except New York residency. It is long settled that although the Fifth Amendment does not contain a counterpart to the Fourteenth Amendment's right to equal protection, equal protection and due process are not mutually exclusive. Therefore, a discriminatory application of law by the federal government, where unjustifiable, can constitute a denial of due process. See Bolling v. Sharpe, 347 U.S. 497, 498-99, 74 S.Ct. 693, 694, 98 L.Ed. 884 (1954); United States R.R. Retirement Bd. v. Fritz, 449 U.S. 166, 173 n. 8, 101 S.Ct. 453, 458 n. 8, 66 L.Ed.2d 368 (1980), Although the Fifth Amendment contains no equal protection clause, it does forbid discrimination that is so unjustifiable as to be violative of due process.'  Thus, if a federal statute is valid under the equal protection component of the Fifth Amendment, it is perforce valid under the Due Process Clause of that Amendment. (citations omitted). We employ the same test to evaluate the alleged violation of the equal protection component of the Fifth Amendment as we would to evaluate an alleged violation of the Fourteenth Amendment's Equal Protection Clause. See e.g., Bowen v. Gilliard, 483 U.S. 587, 598-601, 107 S.Ct. 3008, 3015-17, 97 L.Ed.2d 485 (1987). Generally, unless governmental classifications affect a fundamental right, they need only bear a rational relation to a legitimate governmental purpose. See Regan v. Taxation With Representation, 461 U.S. 540, 547, 103 S.Ct. 1997, 6 2001, 76 L.Ed.2d 129 (1983). The parameters of rational basis review are well settled. In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some reasonable basis, it does not offend the Constitution simply because the classification is not made with mathematical nicety or because in practice it results in some inequality. The problems of government are practical ones and may justify, if they do not require, rough accommodations—illogical, it may be, and unscientific. A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it. Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970). In the present case, the rational basis for the settlement's geographic limitation is clear.7 The settlement was intended to recompense only those persons who had been harmed. The Stieberger plaintiffs contended they suffered harm from certain policies of the Secretary. However, actual harm occurred because of the way those policies were implemented. Because the improper implementation of the policies was geographically limited, the settlement was also geographically limited. Specifically, the original Stieberger plaintiffs, Theresa 7 Appellant cites Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979) for the proposition that class actions involving governmental policy should be nationwide in scope. We do not read Yamasaki for that proposition, and, in fact, note that the Supreme Court advised federal courts to exercise caution before certifying a nationwide class. See id. at 702, 99 S.Ct. at 2558 ([A] federal court when asked to certify a nationwide class should take care to ensure that nationwide relief is indeed appropriate in the case before it, and that certification of such a class would not improperly interfere with the litigation of similar issues in other judicial districts.). 7 Stieberger and the City of New York, challenge[d] two policies implemented by the United States Department of Health and Human Services (HHS) and the Social Security Administration (SSA): non-acquiescence and Bellmon Review. Non-acquiescence is the agency's alleged policy of adjudicating claims without implementing the holdings in decisions of United States Court of Appeal. Bellmon review is the agency's policy pursuant to which the decisions of Administrative Law Judges (ALJs), who had rendered a high percentage of pro-claimant determinations in disability benefits cases, were subject to agency-initiated review. Plaintiffs mov[ed] for full summary judgment but address[ed] only the non-acquiescence issue on the theory that they would be entitled to the same relief if they prevailed on one or both issues. Stieberger v. Sullivan, 738 F.Supp. at 722. The Stieberger plaintiffs alleged non-acquiescence in thirteen Second Circuit holdings. The district court found that the policy of non-acquiescence was unlawful, but granted summary judgment in only four of the thirteen claims. Summary judgment on three other claims was denied without prejudice, and summary judgment was denied with prejudice on the final six claims. See id. at 758-59. The Secretary elected to settle the matter rather than proceeding to trial on the remaining claims. As stated previously, the Stieberger class suffered harm as a result of the implementation of the policies, not as a result of the policies themselves. In other words, the district court found harm only where a specific Second Circuit precedent was not applied. The settlement agreement was intended to compensate persons who were harmed because of the Secretary's failure to correctly apply these Second Circuit precedents. Therefore, assuming, ad arguendo, that non-acquiescence is unlawful, to prove a violation of due process Appellant must show that he, like the 8 Stieberger class, was harmed by the Secretary's failure to apply Second Circuit precedent. Because Second Circuit precedent is not binding in this jurisdiction, Appellant can show no harm. In fact, Appellant fails to show non-acquiescence in any relevant precedent,8 and therefore fails to show any due process violation resulting from his exclusion from the settlement agreement. Appellant also argues that the scope of the settlement is broader than the alleged harm because the right to reopen was not specifically limited to those persons whose claims were denied as a result of the Secretary's non-acquiescence. Therefore, Appellant contends that the settlement lacks a rational relationship to the harm alleged. Appellant's argument assumes too much. We must bear in mind that, as stated by the district court, the settlement is a compromise intended to establish a reasonable balance, especially bearing in mind the length of time that would elapse, absent a settlement, before any concrete benefits could be delivered to any class member and the costs and complexity of implementing a settlement which followed literally the contours of the Court's liability determinations. Stieberger v. Sullivan, 792 F.Supp. at 1377 (emphasis supplied). While there may not be a one-to-one relationship between the harm suffered and the relief provided, it cannot be said that the scope of the settlement and the harm are not rationally related. The fact that the Secretary found it more efficient to offer relief to a broad group of applicants rather than attempt to find 8 In our only case on point, we found the evidence insufficient to show the Secretary was disregarding our precedents. See Floyd v. Bowen, 833 F.2d 529 (5th Cir.1987). 9 a method to discern which applicants had been actually harmed by the Secretary's non-acquiescence is of no moment to our analysis. The terms of the settlement agreement make clear that the purpose behind reopening the applications is to ensure that the Secretary properly applied Second Circuit precedent in evaluating the claims.9 In other words, unless the applicant was in fact harmed by the failure to apply Second Circuit precedent, the Secretary will conclude that benefits were properly denied, and the applicant will gain absolutely no advantage from the relief provided by the settlement agreement. The terms of the settlement clearly bear a rational relationship to the harm alleged. In summary, the plaintiffs in Stieberger demonstrated harm by proving to the satisfaction of the district court that the Secretary had engaged in non-acquiescence as to certain Second Circuit precedents. The Secretary chose to compromise the litigation rather than allowing the court to fashion a remedy. Because the harm proved was limited geographically, so also were the terms of the settlement geographically limited.10 The geographic distinction is rationally based, and Appellant can show no violation of due process.