Johnson v. Heckler

• Decision Date: 15 March 1985
• Docket Number: No. 83 C 4110.,83 C 4110.
• Citation: 604 F. Supp. 1070
• Parties: Edna JOHNSON and Jerome Montgomery, on their own behalf and on behalf of all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Northern District of Illinois

604 F. Supp. 1070

Edna JOHNSON and Jerome Montgomery, on their own behalf and on behalf of all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.

No. 83 C 4110.

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

March 15, 1985.

Joseph A. Antolin, Shelley Davis, Robert E. Lehrer, Legal Assistance Foundation of Chicago, Chicago, Ill., for plaintiffs.

Gregory C. Jones, Acting U.S. Atty. by Linda Wawzenski, Asst. U.S. Atty., Chicago, Ill., Randolph W. Gaines, A. George Lowe, Mary Gludt, Disability Litigation Branch, Social Sec. Div., Dept. of Health & Human Services, Baltimore, Md., for defendant.

ORDER

BUA, District Judge.

Before the Court is defendant's motion for a stay of judgment of this Court's order dated September 19, 1984, pursuant to Rule 62 of the Federal Rules of Civil Procedure, pending an appeal to the Seventh Circuit Court of Appeals. Also before the Court is plaintiffs' motion for a finding of civil contempt and sanctions and for further relief pursuant to 28 U.S.C. § 2202. For the reasons stated herein, plaintiffs' motion for a finding of civil contempt and sanctions is denied. Plaintiffs' motion for further relief is granted insofar as the Court clarifies the injunctive relief ordered in its September 19, 1984 order. Finally, defendant's motion for a stay of the injunctive relief pending appeal is denied.

I. FACTS

On September 19, 1984, this Court entered an order granting summary judgment in favor of the plaintiff class and enjoining the defendant Secretary of Health and Human Services ("the Secretary") from applying the severity regulations and rulings insofar as they mandate (1) consideration at the second stage of the sequential evaluation process of a claimant's ability to do "basic work activities" as opposed to "previous work," and (2) consideration of the combined effects of unrelated impairments only if they are severe and expected to last 12 months. Johnson v. Heckler, 593 F.Supp. 375, 381-82 (N.D.Ill. 1984). In addition, the order provided preliminary and permanent injunctive relief requiring the Secretary to:

(1) hold new disability hearings for class members;

(2) reinstate disability benefits under Title II and/or XVI of the Social Security Act pending hearing determination by the Social Security Administration (SSA) for class members whose benefits had been terminated as a result of the policies described above; and

(3) grant retroactive benefits to class members who, after a new hearing, are found to be disabled.

On October 1, 1984, pursuant to Fed.R. Civ.P. 59, the Secretary timely filed a Motion to Alter or Amend judgment. On October 12, 1984, pursuant to Fed.R.Civ.P. 62, the Secretary filed a Motion to Stay Judgment Pending Disposition of the Motion to Alter or Amend Judgment. In the interim, on October 10, 1984, the Social Security Administration (SSA) issued an instruction by teletype to all SSA components to "immediately stop processing denials/cessation on claims for residents of Illinois based on a finding of `nonsevere impairment' without consideration of vocational factors and residual functional capacity." Emergency Instruction IT-239-89 (October 10, 1984). The October 10 teletype further instructed "all components within the State of Illinois ... to immediately stop issuing determinations/decisions on cases that would be denied/ceased on the basis of a `nonsevere' impairment(s)," and to hold such cases pending further instructions.

On December 17, 1984, this Court entered an order denying defendant's motion to alter or amend the September 19, 1984 order. On the same date, the Court entered an order denying without prejudice the plaintiff class' motion for further relief and invited it to refile the motion if the Secretary did not comply with the September 19, 1984 order after December 17, 1984. A notice of appeal from the December 17, 1984 denial of defendant's motion to alter or amend was filed on February 15, 1985.

II. DISCUSSION

The issue presented is whether the Court should grant a stay of its order imposing a permanent injunction on the Secretary and the SSA to refrain from applying the incorrect standard in determining whether a severe impairment exists, as well as the other injunctive relief ordered. Johnson v. Heckler, supra, 593 F.Supp. at 381-82. Rule 62(c) of the Federal Rules of Civil Procedure provides:

When an appeal is taken from an interlocutory or final judgment granting ... an injunction, the court, in its discretion may suspend or modify ... an injunction during the pendency of the appeal....

Once an injunction has been granted, the party seeking the stay must show (1) that he is likely to prevail on the merits of the appeal, (2) that he will suffer irreparable injury if the stay is denied, (3) that other parties would not be substantially harmed by the stay, and (4) that a stay would be in the public interest. Decker v. U.S. Dept. of Labor, 485 F.Supp. 837, 844 (D.C.Wis.), aff'd and remanded, 661 F.2d 598 (7th Cir.1980); see also Adams v. Walker, 488 F.2d 1064, 1066 (7th Cir.1973); Collin v. O'Malley, 452 F.Supp. 577 (N.D.Ill.1978). In short, the Court must consider the relative hardships to the parties arising out of the relief sought, in light of the probable outcome of the appeal. Indianapolis Colts v. Mayor & City Council of Baltimore, 733 F.2d 484, 486 (7th Cir.1984).

1. Likelihood of Success on Appeal

For the most part, defendant Secretary has restated her arguments in opposition to the September 19, 1984 order which she previously presented in her motion to alter or amend. The Secretary reiterates her three grounds on which she is likely to prevail on appeal and attempts to bolster them with new cases and recent legislation. Plaintiff class argues that the Secretary's repetition of arguments from her previously-denied motion to alter or amend underscores the weakness of her position and the unlikelihood of her prevailing on appeal.

The first ground set forth by the Secretary is the jurisdictional bar of the claimant's failure to exhaust his administrative remedies. In its order dated December 17, 1984, this Court recognized this requirement and the circumstances under which it could find a waiver of the exhaustion of administrative remedies. Once again, as she did in her motion to alter or amend, the Secretary asserts that her reading of Heckler v. Ringer, ___ U.S. ___, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984) is the proper one and therefore that she will prevail on this issue on appeal.

The Court rejects the Secretary's broad interpretation of Ringer in favor of the narrow interpretation contained in its order dated December 17, 1984. Johnson v. Heckler, No. 83 C 4110, slip op. at 8 (N.D. Ill. December 17, 1984). The Court carefully analyzed the language of Ringer and applied the "inextricably intertwined" standard set forth therein to determine whether this case was a proper one for waiver of exhaustion of administrative remedies. Pursuant to Mathews v. Eldridge, 424 U.S. 319, 328-30, 96 S.Ct. 893, 899-900, 47 L.Ed.2d 18 (1976), the Court held the waiver of complete administrative exhaustion was proper because plaintiff class' legal claims are collateral to a claim for benefits and the class interest in prompt judicial review is so great that deference to the Secretary's judgment is inappropriate.

In holding that the claims of plaintiff class are collateral to a claim for benefits, the Court followed Justice Rehnquist's majority opinion and applied his test for "inextricably intertwined" claims, which would not be collateral to a claim for benefits. In support of its holding, the Court reasoned:

... The Court's narrow interpretation of Ringer is reinforced by Justice Rehnquist's reference to "only essentially ministerial details" remaining after the relief sought if it were granted. Id. 104 S.Ct. at 2022.

In the present case, notwithstanding the plaintiffs' attempt to invalidate the Secretary's current policy, the Court finds that more than "ministerial details" remain before members of the plaintiff class will receive benefits. The Court's order which invalidated two of the Secretary's regulations required her to hold new disability hearings in order to apply the correct standard for disability as defined by the Court. Johnson v. Heckler, 593 F.Supp. 375, 381-82 (N.D.Ill.1984). Since some members of the plaintiff class may not be awarded disability benefits after the new hearings, an award of benefits is by no means automatic or ministerial. Johnson v. Heckler, supra, 100 F.R.D. 70 at 74 (1983). Therefore, the Court concludes that plaintiffs' claims are collateral to claims for benefits. Id.

Johnson v. Heckler, supra, slip op. at 8.

The Secretary cites no new authority to persuade the court to accept her broad interpretation of Ringer. However, this Court has found a recent case from the Eighth Circuit Court of Appeals to support its narrow interpretation of Ringer. Polaski v. Heckler, 751 F.2d 943 (8th Cir.1984). Polaski is a class action challenging the Secretary's nonacquiescence in Eighth Circuit decisions with respect to the proper standard for evaluating pain and other subjective complaints, and with respect to the proper standard for terminating disability benefits. The district court enjoined the Secretary from denying or terminating disability benefits unless she followed the Eighth Circuit decisions regarding those standards. The district court also provided for reconsideration of the claims of persons within the class under the designated standards. Id. at 944-45.

In holding that waiver of complete administrative exhaustion was proper, the Polaski court said:

Finally, the plaintiffs' claims are admittedly not "wholly collateral" to their claims for benefits, as was true in Eldridge. But the focus of their relief as a class—the Secretary's compliance with our case law and the 1984 Act—is substantially collateral to the issue of whether they are in

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