Holden v. Heckler

• Decision Date: 29 May 1984
• Docket Number: Civ. A. No. C84-548,C83-4893.
• Citation: 584 F. Supp. 463
• Parties: Norma HOLDEN, et al., Plaintiffs, and State of Ohio, Through Richard F. Celeste, Governor, Intervenor, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant. Gerald BREST, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Northern District of Ohio

584 F. Supp. 463

Norma HOLDEN, et al., Plaintiffs, and State of Ohio, Through Richard F. Celeste, Governor, Intervenor, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.

Gerald BREST, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.

Civ. A. Nos. C84-548, C83-4893.

United States District Court, N.D. Ohio, E.D.

April 30, 1984.

Opinion on Motion for Stay Pending Appeal May 29, 1984.

COPYRIGHT MATERIAL OMITTED

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Mark J. Valponi, David B. Dawson, Paula Gellman, Cleveland, Ohio, for plaintiffs.

Kathleen Ann Sutula, Steven D. Bell, Asst. U.S. Attys., Cleveland, Ohio, Rita S. Eppler, Asst. Atty. Gen., Columbus, Ohio, for defendant.

                I.   PROCEDURAL HISTORY                  3
                II.  DISABILITY PAYMENTS UNDER THE
                     SOCIAL SECURITY ACT: SSDI AND SSI   5
                III. THE NAMED PLAINTIFFS AND CLASS
                     MEMBERS                            23
                IV.  JURISDICTION                       35
                V.   CLASS CERTIFICATION                53
                VI.  PRELIMINARY INJUNCTION             60
                VII. RELIEF                             71
                

MEMORANDUM AND ORDER

ANN ALDRICH, District Judge.

This class action raises statutory and constitutional challenges to policies and procedures by which federal and state officials have terminated social security disability benefits without demonstrating by substantial evidence that the recipients are no longer disabled within the meaning of the law. The plaintiffs contend that this practice causes widespread financial hardship and physical and mental suffering and is being conducted in defiance of the Sixth Circuit Court of Appeals' clear and consistent rulings interpreting the Social Security Act. They seek relief forbidding the bureaucracy that grants disability benefits from revoking them unless it proves that the recipient's medical condition has improved, and restoring benefits to individuals who were wrongfully terminated. After considering complicated legal questions and compelling testimony by victims of the termination policy, this Court certifies this case as a class action and orders the declaratory and injunctive relief set forth below.

I. PROCEDURAL HISTORY

This opinion deals with two virtually identical class actions filed with this Court in recent months: Brest v. Heckler, No. C83-4893 (N.D.Ohio filed Dec. 14, 1983) and Holden v. Heckler, No. C84-548 (N.D. Ohio filed Feb. 16, 1984). On March 12, the two actions were consolidated under Fed.R. Civ.P. 42(a). The parties argued the plaintiffs' Joint Motion for Class Certification on March 21, after which the proposed class in Holden was tentatively certified.¹ A day-long hearing on plaintiffs' Joint Motion for a Preliminary Injunction was held on March 30.

The plaintiffs in both cases challenged programs administered jointly by the Social Security Administration ("SSA"), part of the Department of Health and Human Services ("HHS"), and by the Ohio Bureau of Disability Determinations ("BDD"); the original defendants in each case were Margaret M. Heckler, the Secretary of HHS ("Secretary"), and Leonard F. Herman, the director of the BDD. Since the State of Ohio had previously appeared as amicus curiae for the plaintiffs in a similar class action, Mental Health Association of Minnesota v. Heckler, 720 F.2d 965 (8th Cir. 1983), it negotiated to alter its role in this case. On March 29, the State and the plaintiffs submitted a stipulated motion dismissing Herman as a defendant, which was granted. After oral argument at the preliminary injunction hearing the following day, the State was permitted to intervene as a plaintiff under Fed.R.Civ.P. 24(b) and participate in the hearing. The Secretary was given leave to move to dismiss the complaint in intervention, and subsequently did so.

The named plaintiffs, the tentatively certified Holden class, and the State of Ohio are now aligned against the Secretary, who is the sole defendant. Jurisdiction over her is invoked under the general federal question jurisdictional provision, 28 U.S.C. § 1331; the mandamus jurisdiction provided by 28 U.S.C. § 1361; judicial review provisions of the Social Security Act, 42 U.S.C. §§ 405(g) and 1383(c)(3); the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202; and the judicial review provision of the Administrative Procedure Act, 5 U.S.C. § 702. In addition to moving to dismiss the State, the Secretary has challenged this Court's subject matter jurisdiction over the class in a number of her pleadings.

II. DISABILITY PAYMENTS UNDER THE SOCIAL SECURITY ACT: SSDI AND SSI

A. Initial Determinations of Disability

1. The Programs

The named plaintiffs and the proposed class members are all residents of Ohio who currently receive, or formerly received, benefits under Title II or Title XVI of the Social Security Act ("Act"). Title II provides Social Security Disability Insurance ("SSDI") benefits to disabled workers based upon their earnings records. 42 U.S.C. §§ 401-431. Title XVI, the Supplemental Security Income ("SSI") program, provides disability payments to the aged, blind, and disabled if they meet certain income eligibility standards. 42 U.S.C. §§ 1381-1383. Both programs were established to relieve state and local governments of the financial burden of assisting the disabled. SSDI was enacted in 1956 and SSI in 1972, and both programs expanded far beyond their sponsors' expectations. In 1956 approximately 150,000 Americans drew some $59 million in SSDI benefits; by 1982 more than four million workers and beneficiaries drew an estimated $18.5 billion in SSDI and SSI funds. See S.Rep. No. 97-648, 97th Cong., 2d Sess. 13-16, reprinted in 1982 U.S.Code Cong. & Ad.News 4373, 4384-87.

Under both the SSDI and SSI programs, disability is defined as the "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months." 42 U.S.C. §§ 423(d)(1)(A), 1382c(a)(3)(A). The Secretary promulgates regulations governing determination of eligibility for disability payments. 20 C.F.R. pt. 404, subpt. P; 20 C.F.R. pt. 416, subpt. I. These complex regulations implement the broad congressional directive expressed in 42 U.S.C. §§ 423(d)(2)(A) and 1382c(a)(3)(B), which requires that an individual "shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education and work experience, engage in any other kind of substantial gainful work which exists in the national economy". Under 42 U.S.C. §§ 421 and 1383b, state agencies conduct disability determinations pursuant to contracts with the Secretary; BDD, a unit of the Ohio Rehabilitative Services Commission, makes all determinations of initial and continuing disability in the State of Ohio.

2. The Implementing Regulations and the Five-Step Evaluation

The regulations create a five-step "sequential evaluation" process for evaluating benefits claims by applicants and recipients. The first step disqualifies individuals who are engaged in "substantial gainful activity". 20 C.F.R. §§ 404.1520(a), 416.920(a). Claimants who pass this barrier must then demonstrate that their impairment is severe; if it is not, benefits may not be issued. §§ 404.1520(c), 416.920(c). If the individual meets or equals a disability described in the "Listing of Impairments", he or she is presumed disabled and automatically receives benefits. §§ 404.1520(d), 416.920(d); see subpt. P, app. 1 (list of conditions, signs, symptoms).

An individual with a severe impairment that does not meet or equal any of the listed impairments is evaluated under the fourth step, which involves two sub-steps: (1) a determination of the claimant's residual functional capacity ("RFC"); and (2) a determination of whether the claimant has sufficient RFC to return to the physical or mental demands of the work he or she performed in the past. §§ 404.1520(e), 416.920(e). The RFC assessment is not limited to formal medical findings; it includes other pertinent, informal evidence. If the individual can do his or her past work, no benefits are awarded. If not, the fifth and final test is applied: a determination of whether the individual is unable to do other work which exists in substantial numbers in the economy. §§ 404.1520(f), 416.920(f). This assessment includes evaluations of the claimant's age, education, and work experience. If the claimant would be unable to perform this "other work", he or she is awarded benefits.

The regulations thus provide two paths claimants can follow to obtain benefits: (1) a listed impairment; or (2) a lack of RFC combined with an inability to do other work.

All initial disability claims are made by lay examiners employed by BDD. If the claim is denied, the claimant may ask for reconsideration by BDD. A claimant who receives a second adverse decision may appeal to an Administrative Law Judge ("ALJ"), an Article I judge employed by the SSA. Adverse decisions by the ALJ may be appealed to the SSA Appeals Council; adverse decisions by the Council may be appealed to federal district court pursuant to 42 U.S.C. § 405(g).

B. Termination of Disability Payments

1. Interpretation of the Act: 1954-1976

Title 42 U.S.C. § 423(a)(1)(D) governs termination of SSDI disability benefits. In pertinent part it provides:

... The termination month for any individual shall be the third month following the month in which his disability ceases; except that, in the case of an individual who has a period of trial work ..., the termination month shall be the earlier of (I) the third month following the earlier month after the end of such period of trial work with respect to which such individual is determined to no longer be suffering from a disabling physical or mental impairment, or (II) the third month following the

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