Opinion ID: 358922
Heading Depth: 3
Heading Rank: 2

Heading: Utility of Prior Hearing

Text: 22 The second factor to be considered under Eldridge is the fairness and reliability of the existing . . . procedures, and the probable value, if any, of additional procedural safeguards. 424 U.S. at 343, 96 S.Ct. at 907. In that case the Court was faced with the termination of disability benefits, which under the statute and regulations would require a medical assessment of the worker's physical or mental condition. Id. The Court found: 23 This is a more sharply focused and easily documented decision than the typical determination of welfare entitlement. In the latter case, a wide variety of information may be deemed relevant, and issues of witness credibility and veracity often are critical to the decisionmaking process. Goldberg noted that in such circumstances 'written submissions are a wholly unsatisfactory basis for decision.' 397 U.S., at 269 (90 S.Ct., at 1021. 24 By contrast, the decision whether to discontinue disability benefits will turn, in most cases, upon 'routine, standard, and unbiased medical reports by physician specialists', Richardson v. Perales, 402 U.S. (389) 404 (91 S.Ct. 1420, at 1428, 28 L.Ed.2d 842 (1971)), concerning a subject whom they have personally examined. . . . The potential value of an evidentiary hearing, or even oral presentation to the decisionmaker, is substantially less in this context than in Goldberg. 25 424 U.S. at 343-45, 96 S.Ct. at 907. The court noted that the claimant's access to information in files and the opportunity to submit further information after an initial decision lessened the risk of an erroneous determination. The court also looked to the low percentage of all disability terminations which are reversed after administrative appeal, but noted that although we view such information as relevant, it is certainly not controlling in this case. Id. at 347, 96 S.Ct. at 908. 26 In our first decision in this case we relied to a large extent on the utility of a hearing as the determinant of what process should be due. In that opinion we separately analyzed reconsideration and waiver cases, and found a prior hearing generally not required in the former and generally required in the latter. 27 After a recipient of social security benefits receives a notice of an initial determination of overpayment and recoupment, he may request reconsideration of that decision. In our previous opinion, we agreed with the Secretary that  'reconsideration' cases are generally well suited to resolution by documentary proof. 519 F.2d at 165. The decision of whether in fact an overpayment was made will usually turn on arithmetic calculations, such as whether the administration correctly computed an earnings statement, or whether two checks were received instead of one. We therefore concluded: 28 In such circumstances, an examination of social security records and cancelled checks would seem to be sufficient, and it is hard to see how an oral hearing would be of much benefit to the claimant. 29 Id. 30 We distinguished waiver cases. While some of the issues involved in the determination of whether the Secretary is barred from recoupment by section 204(b) are susceptible of documentary proof, a substantial number are not. A waiver depends on fault, financial dependence, and detrimental reliance. Id. at 166-67, Elliott v. Weinberger, supra, 564 F.2d at 1232. Particularly the finding of fault and to a lesser extent the other two factors rest on a complex analysis of facts and of credibility. We noted that when credibility determinations were involved, the Supreme Court had indicated that written submissions were insufficient for an accurate determination and that an oral hearing would be needed. 519 F.2d at 164-67. 31 We believe that this analysis of the utility of a pre-recoupment hearing in reconsideration and waiver cases is fully consistent with Eldridge. Both our prior decision and the Supreme Court's analysis of due process focused on the nature of the evidence likely to be needed for a decision by the Secretary. When that evidence is well suited to evaluation in written form, there is little need for a prior oral hearing. When the Secretary's determination of a claim rests, for example, on credibility, an oral hearing is crucial to the truth-finding process and thus is an important element in deciding what procedures the Constitution requires. See Goldberg v. Kelly, supra, 397 U.S. at 268-69, 90 S.Ct. 1011; Kennedy v. Robb, 547 F.2d 408, 414-15 (8th Cir. 1976), Cert. denied, 430 U.S. 913, 97 S.Ct. 1325, 51 L.Ed.2d 592 (1977). See generally Board of Curators v. Horowitz, 435 U.S. 78, 84-91, & n. 4, 98 S.Ct. 948, 952-955, 55 L.Ed.2d 124 (1978); Stretten v. Wadsworth Veterans Hospital, 537 F.2d 361, 368-69 (9th Cir. 1976). This distinction is the same as was drawn by the Eldridge Court to contrast the need for a hearing prior to the termination of disability payments with the pre-termination hearing held to be required in Goldberg. 11 Accord, Elliott v. Weinberger, supra, 564 F.2d at 1231-34.C. Governmental Interest 32 The third part of the Eldridge balancing test is the government's interest, including the governmental function involved and the fiscal and administrative burdens that a pre-recoupment hearing would involve. In large part we believe that the government interest involved in this case is similar to that analyzed in Eldridge. We do find some distinctions between this case and Eldridge, which indicate that our requiring a prior hearing would impinge less on the administration of social security benefits. 33 The Eldridge Court did not have clear evidence of the administrative burden of imposing a requirement of a hearing prior to the termination of disability payments. The Court commented that (n)o one can predict the increased demand for hearings if a hearing were required before termination instead of afterwards. It then reasoned, the fact that full benefits would continue until after such hearings would assure the exhaustion in most cases of this attractive option. 424 U.S. at 347, 96 S.Ct. at 909. Further, the Court faced widely varying estimates of the probable additional costs of pre-termination hearings, and so concluded that experience with constitutionalizing administrative procedures suggested that the additional cost would not be insubstantial. Id. 34 First, on the basis of materials submitted to this court, we have reason to question whether the assumption in Eldridge about increased numbers of requests for hearings should be applied to our analysis of a right to a pre-recoupment hearing. 12 Although we agree that it is impossible to predict accurately the increased burden of providing hearings, we believe it likely that this burden would be less than was assumed in the circumstances considered in the Supreme Court's decision. 35 Second, we believe that the Secretary faces much less risk of loss of erroneous payments to recipients than was present in Eldridge. In that case, the hearing under discussion would determine whether the recipient was still eligible for benefits, after the Secretary had made an initial determination of ineligibility. If payments were made pending the hearing, the Secretary faced a substantial risk of paying benefits to an ineligible recipient without hope of recovering those funds. In contrast, the hearing we are considering is to determine whether the Secretary will be permitted to recoup an overpayment by deducting the amount from a continuing stream of benefits being paid to a concededly eligible recipient. In the general case, a delay in beginning recoupment will not jeopardize the Secretary's ability to recover from later payments. Thus, we believe that the Secretary's interest in preserving public funds is far less than was before the Supreme Court in Eldridge. See generally Goldberg v. Kelly, supra, 397 U.S. at 265, 90 S.Ct. 1011. D. Conclusion 36 In our prior consideration of this case, we looked primarily at the utility of a pre-recoupment hearing. In light of the differences we found in the determination of a reconsideration and a waiver case, we distinguished the process which would be required in each. For reconsideration cases, where we found that documentary evidence was often sufficient for an accurate determination of whether an overpayment had been made, we concluded: 37 Consequently, the Secretary's pre-recoupment procedures permitting written evidence and providing for an examination of written documents, when coupled with a right of a Post -recoupment oral hearing, satisfy due process. 38 519 F.2d at 165. We did, however, add a caveat to this holding. Because we could not envision all of the sorts of inquiries which might be called reconsiderations under the regulations, we insisted that pre-recoupment oral hearing be provided when the Secretary's decision did not rest on documentary evidence, but instead involved an evaluation of the claimant's credibility. Id. at 165-66. 39 For waiver cases, in which we believed that credibility determinations would generally be crucial to the Secretary's decision, we held that the Secretary would generally be required to give a pre-recoupment oral hearing. We did limit the right to a prior hearing, however, to those cases in which such a requirement would serve a useful function: 40 While we believe that claimants in waiver cases have a constitutional right to a pre-recoupment oral hearing, that right may not attach in all cases. Where a claimant in a waiver case raises no disputed issue of fact, or where, accepting his version of the facts as true, we could say as a matter of law that he was not entitled to retain the overpayment, then again it is hard to see how a pre-recoupment hearing would be of benefit. Thus, the constitutional requirement of a hearing may be limited to some extent by principles analogous to summary judgment in civil litigation. 41 Id. at 167 (footnote omitted). 42 We find that our analysis of due process in our first consideration of this case is substantially consistent with the three-factor balancing test set forth in Eldridge. Accord Elliott v. Weinberger, supra. 43 We believe that the plaintiff's private interest in having a pre-recoupment hearing, particularly in waiver cases, is somewhat greater than that which was before the Supreme Court in Eldridge, and that the government's interest in delaying the hearing is somewhat less. The most substantial difference between the recoupment procedure and the termination of disability is the value of a prior hearing to the fact-finding which the Secretary must perform. Generally, reconsideration cases may adequately be determined on the basis of documentary evidence, while generally we believe that a hearing is the only adequate proceeding for determination of a waiver case. 44 We hold that when the claimant has filed only for reconsideration, the balance of the three factors yields the same result as was reached in Eldridge that a post-recoupment hearing will suffice. We adhere to our former opinion regarding reconsideration cases except in one respect. In the prior opinion, we said that if a reconsideration case should arise which rested on credibility evidence, a hearing would be constitutionally required. We do not believe that this qualification is consistent with Eldridge, which declares that procedural due process is to be shaped according to the risk of error inherent in the truthfinding process as applied to the generality of cases, not the rare exceptions. 424 U.S at 344, 96 S.Ct. at 907. 45 When the recipient claims a waiver, i. e. that the Secretary is barred from recouping an overpayment by section 204(b), we adhere fully to our prior decision. Because of the similarity of the waiver inquiry to that considered by the Supreme Court in Goldberg v. Kelly, supra, and in light of the analysis of the Eldridge decision, we hold that the due process clause requires a pre-recoupment oral hearing when a recipient has filed a legally sufficient claim of entitlement to waiver of recoupment under section 204(b). 46 To the extent that a hearing is required, we do not believe that a full judicial or quasi-judicial proceeding is necessary. A court must be flexible in fitting procedural requirements to the circumstances of a case. Board of Curators v. Horowitz, supra, 435 U.S. at 78, 98 S.Ct. 948; Cafeteria Workers v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961). After considering all factors under the analysis in Eldridge, we find that an informal oral hearing will provide adequate safeguards to recipients of Title II benefits who are subject to recoupment. We adhere fully to the minimum standards for such a hearing which we described in our earlier opinion: 47 We therefore believe that due process requires only an informal, oral hearing which provides the following safeguards: 48 1) an impartial decision maker separated from those making the previous administrative determinations in the case; 49 2) timely and adequate notice to the recipient of the reasons for recoupment; 50 3) an effective opportunity for the recipient to confront and cross-examine adverse witnesses; 51 4) an effective opportunity for the recipient to present his own argument and evidence orally; 52 5) an opportunity to retain counsel or have the informal assistance of a friend, if the recipient desires; 53 6) a report written by the decision maker which informally states the reasons and the evidence relied on in reaching his decision; 54 7) an opportunity for all parties to receive and challenge the decision maker's report before it becomes final. 55 519 F.2d at 168-69 (footnotes omitted). Accord Elliott v. Weinberger, supra, 564 F.2d at 1235; See Goldberg v. Kelly, supra, 397 U.S. at 267-71, 95 S.Ct. 1011.