Opinion ID: 3158926
Heading Depth: 2
Heading Rank: 1

Heading: administrative waiver under poulin

Text: Canonsburg argues that, under Poulin, the Secretary’s failure to raise issue preclusion before the PRRB—or on the Administrator’s discretionary review of the PRRB—constitutes waiver of the defense in district court. We disagree. In Poulin, the plaintiff filed for Social Security disability benefits in 1974 but his claim was denied by the Social Security Administration. See 817 F.2d at 868. He refiled his disability-benefits application in 1980 and the administrative law judge (ALJ), the Social Security Administration Appeals Council and the district court all rejected his application on the merits. Id. Although the Social Security Act, Pub. L. No. 74-271, 49 Stat. 620 (1935) (codified as amended at 42 U.S.C. §§ 301 et seq.), and HHS regulations gave the ALJ discretion to apply issue preclusion, 8 the ALJ declined to do so and instead reached the merits of the benefits decision. See 8 “An administrative law judge may dismiss a request for a hearing under any of the following conditions: . . . (c) The administrative law judge decides that there is cause to dismiss a hearing request entirely or to refuse to consider any one or more of the issues because—(1) The doctrine of res judicata applies in that we have made a previous determination or decision under this subpart about your rights on the same facts and on the same issue or issues, and this previous determination or decision has become final by either administrative or judicial action . . . .” 20 C.F.R. § 404.957 (1986) (emphasis added). 13 Poulin, 817 F.2d at 868–69. After filing its answer in district court, HHS argued for the first time in its motion for judgment of affirmance that the denial of Poulin’s 1974 benefits application meant that his 1980 application was barred by issue preclusion. See id. at 869. “The [d]istrict [c]ourt did not even address this tardy [issue preclusion] claim.” Id. On appeal, we held that, if a claim has “been reconsidered on the merits to any extent and at any administrative level, it is . . . properly treated as having been, to that extent, reopened as a matter of administrative discretion” and “is also subject to judicial review to the extent of the reopening.” Id. (quoting McGowen v. Harris, 666 F.2d 60, 65–66 (4th Cir. 1981)). Because HHS “expressly waived applicability of administrative res judicata” at the administrative stage, we concluded, “it may not now advance this doctrine as an alternate basis for its decision.” Id. We further indicated that HHS’s res judicata defense was “also waived” because it failed to raise the defense in its answer in district court as Federal Rule of Civil Procedure 8(c) requires. 9 Id. Thus, “[t]he failure to plead res judicata, coupled with the express waiver at the administrative level, precludes its application now.” Id. Poulin makes two uncontroversial points. First, an agency’s failure to raise issue preclusion in its answer in federal court may constitute waiver under Federal Rule of Civil Procedure 8(c). See id. Second, an agency may not rely on issue preclusion to the extent it “express[ly]” exercises its discretion to reopen an earlier decision on the merits. Id. Both points are inapplicable here. First, the Secretary plainly raised issue preclusion in her answer to Canonsburg’s federal 9 “In responding to a pleading, a party must affirmatively state any avoidance or affirmative defense, including: . . . res judicata . . . .” FED. R. CIV. P. 8(c). 14 complaint. Moreover, the Secretary did not reopen Canonsburg I, “express[ly]” or otherwise, id., during the administrative proceedings. In Poulin, the first decision was an administrative decision and thus one that HHS had the power to revisit. See id. In this appeal, Canonsburg I is an earlier judicial decision which the Secretary is without authority to affect. Even assuming the Secretary had the power to reopen Canonsburg I, 10 this appeal is a far cry from Poulin. The PRRB, which, according to the record, appears to have been unaware of Canonsburg I, interpreted section 2534.5 in the first instance on the basis of a circuit decision to which Canonsburg was not a party. See Provider Reimbursement Review Board Decision 43–44 (citing St. Luke’s, 315 F.3d at 988–89). Moreover, the Secretary, unlike the Poulin ALJ, did not explicitly decline to apply issue preclusion but instead reversed the PRRB. Because the Secretary did not—and could not—reconsider Canonsburg I and, at the same time, she complied with Rule 8(c), Poulin is inapposite. Our more recent precedent also defeats Canonsburg’s argument that we have adopted a robust administrative waiver 10 The Congress by statute authorizes the Secretary to administer reimbursements but it cannot authorize the reopening of a final judicial decision. See generally Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 218–19 (1995) (“[T]he Framers crafted this charter of the judicial department with an expressed understanding that it gives the Federal Judiciary the power, not merely to rule on cases, but to decide them, subject to review only by superior courts in the Article III hierarchy . . . .”); see id. (“A legislature without exceeding its province cannot reverse a determination once made, in a particular case; though it may prescribe a new rule for future cases.” (quoting THE FEDERALIST No. 81, at 545 (Alexander Hamilton) (J. Cooke ed. 1961))). 15 doctrine in light of Poulin. In Morris v. Sullivan, 897 F.2d 553 (D.C. Cir. 1990), we explained that Poulin is “applicable only when the agency has clearly stated or otherwise demonstrated that it has in fact reopened the original case on the merits and consequently has held a mandatory . . . hearing to reconsider the prior claim afresh.” Id. at 558; cf. Sendra Corp. v. Magaw, 111 F.3d 162, 167 (D.C. Cir. 1997) (under Poulin, agency decision is reviewable on the merits if it exercises discretion to reopen claim). In Morris, we noted that Poulin is limited to cases in which the agency fails to raise issue preclusion as an affirmative defense in district court or it expressly declines to apply issue preclusion when available during administrative proceedings. Morris, 897 F.2d at 557 n.8 (“Morris readily concedes, however, that factually, Poulin is distinguishable . . . in two important ways. First . . . [the Poulin ALJ] declined to exercise his discretion to dismiss” on the basis of res judicata and, second, “the Secretary in Poulin failed to plead res judicata as a defense, thereby waiving his right to interpose it” (some alteration in original)); see generally Nixon v. United States, 978 F.2d 1269, 1297 (D.C. Cir. 1992) (Henderson, J., concurring) (in Poulin, court “did no more than state that parties waive their own right to raise res judicata by failing to plead it”). And in Stanton v. District of Columbia Court of Appeals, 127 F.3d 72 (D.C. Cir. 1997), we declared, citing Poulin, that “[r]es judicata is an affirmative defense that may be lost if not pleaded in the answer; it may not ordinarily be asserted for the first time on appeal.” Id. at 76; see also U.S. Postal Serv. v. NLRB (USPS), 969 F.2d 1064, 1069 (D.C. Cir. 1992) (“[C]ourts do not force preclusion pleas on parties who choose not to make them . . . .”). Other circuits have also refrained from developing any administrative waiver doctrine for issue preclusion that extends beyond our analysis in Poulin. See, e.g., Chavez v. Bowen, 844 F.2d 691, 692–93 (9th Cir. 1988) (allowing res judicata claim on appeal despite ALJ failing to consider res 16 judicata defense in subsequent administrative decision); cf. Kane v. Heckler, 776 F.2d 1130, 1132 (3d Cir. 1985) (“[W]here the administrative process does not address an earlier decision, but instead reviews the entire record in the new proceeding and reaches a decision on the merits, the agency has . . . waived application of res judicata.”). At most, one circuit has included an unsupported statement in a footnote regarding administrative waiver. See, e.g., Mun. Resale Serv. Customers v. FERC, 43 F.3d 1046, 1052 n.4 (6th Cir. 1995) (stating, in footnote without citation to other authority, court would not recognize res judicata defense because defense was not invoked before agency). In sum, the Secretary did not waive her issue preclusion affirmative defense by not raising it at the administrative stage; 11 moreover, she asserted it, expressly and properly, in district court and we are thus free to affirm the district court’s application of the doctrine to Canonsburg’s complaint.