Lopez v. Heckler, 83-6126

Citation713 F.2d 1432
Decision Date24 August 1983
Docket NumberNo. 83-6126,83-6126
PartiesMario LOPEZ, et al., Plaintiffs-Appellees, v. Margaret M. HECKLER, Secretary of Health and Human Services, et al., Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Elena H. Ackel, Los Angeles, Cal., Lew Hollman, Pacoima, Cal., Bruce Iwaskai, Marilyn Holle, Ellen Finkelberg, Frankel & Finkelberg, Los Angeles, Cal., for plaintiffs-appellees.

J. Paul McGrath, Washington, D.C., Stephen S. Trott, William Kanter, Eloise E. Davies, Washington, D.C., for defendants-appellants.

Emergency Motion for a Partial Stay Pending Appeal of a Preliminary Injunction Ordered by the United States District Court for the Central District of California.

Before PREGERSON, BOOCHEVER and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

The Secretary of Health and Human Services seeks a partial stay pending appeal of a preliminary injunction issued by the United States District Court for the Central District of California. 1 See Fed.R.App.P. 8(a); Ninth Circuit R.App.P. 6(h). The order requires the restoration of disability benefits to a large number of Social Security recipients. From 28,000 to 78,000 individuals may be eligible. We reject the Secretary's request for a stay and allow the preliminary injunction to stand.

BACKGROUND

The underlying dispute before the district court involves a class action 2 challenge to policies and procedures used by the Secretary in terminating Social Security disability benefits. See 42 U.S.C. §§ 401-431 (1976 and Supp. IV 1980) (Social Security Disability Insurance (SSDI) benefits for disabled workers); 42 U.S.C. §§ 1381-1383 (1976 and Supp. IV 1980) (Supplemental Security Income (SSI) benefits for persons who are both poor and disabled). According to findings made by the district court, since March of 1981 the Social Security Administration has drastically increased the rate at which it reviews the status of persons Plaintiffs contend that the procedures used by the Secretary of Health and Human Services in terminating the benefits of disabled persons are in direct violation of two decisions of this court. In Patti v. Schweiker, 669 F.2d 582, 587 (9th Cir.1982), and Finnegan v. Matthews, 641 F.2d 1340, 1345 (9th Cir.1981), we held that before Social Security disability benefits can be terminated on the ground that the recipient is no longer disabled, the Secretary must introduce evidence that the recipient's medical condition has improved. The principal rationale underlying these decisions is that the Social Security Administration's initial determination of disability creates a presumption that the person remains disabled. To terminate benefits, then, the Secretary is "required to 'meet or rebut' " the presumption "with evidence that [the recipient's] condition has improved in the interim." Patti, 669 F.2d at 587. See also Rivas v. Weinberger, 475 F.2d 255, 258 (5th Cir.1973) ("Once evidence has been presented which supports a finding that a given condition exists it is presumed in the absence of proof to the contrary that the condition has remained unchanged.").

                receiving disability benefits. 3  As a result, the number of people who have had their benefits terminated annually has doubled--from 98,000 removed from the disability rolls in fiscal year 1981 to 195,474 terminated in fiscal year 1982
                

The Secretary of Health and Human Services subsequently announced that she "does not acquiesce" in and therefore would not follow this court's holdings in Patti and Finnegan. 4 See Social Security Rulings 82-10c and 82-49c. Instead, the Secretary has ordered that Social Security disability benefits be terminated on the ground of lack of disability regardless of whether the recipient's medical condition has improved since the time of the initial disability determination. See Social Security Ruling 81-6.

This policy was challenged by plaintiffs in district court. Plaintiffs' suit is framed in large part as a constitutional challenge to the policy of nonacquiescence. Plaintiffs argue that the policy violates the principles of separation of powers and stare decisis as well as their rights to due process and equal protection.

On June 16, 1983, in a thorough, careful, and well-reasoned decision, Senior District Judge William P. Gray granted plaintiffs' motion for a preliminary injunction. 572 F.Supp. 26. The court restrained the Secretary "[f]rom failing to follow, implement or accord precedential effect to" Finnegan and Patti and from implementing the nonacquiescence policy announced in Social Security Rulings 82-10c, 82-49c, and 81-6.

The Secretary did not seek to stay these aspects of the district court's order. Rather, the government requested that the following portion of the district court's injunction be stayed pending appeal:

(c)(i) Within sixty (60) days following the date of this order, the defendants will notify (a) each class member who had been receiving Supplemental Security Income Disability benefits under 42 U.S.C. § 1382c(a)(3)(E), and who was terminated from such benefits after August 25, 1980, and (b) all other persons who have been terminated from either Title II social security disability insurance or Title XVI Supplemental Security Income Disability after August 30, 1981, for the purported reason that his or her disability had ceased, whether or not such person has appealed, that:

Such person may apply for reinstatement of benefits if he or she believes that his or her medical condition has not improved following the granting of disability benefits.

(ii) Upon receiving such application, the defendants will forthwith reinstate and pay benefits in the monthly amounts (iii) Following such reinstatement, if the defendants or their agents or employees conduct a disability investigation or other screening of such person, they will apply the standards set forth in Patti v. Schweiker and Finnegan v. Matthews and, if they conclude that such person's medical condition has improved and he or she is no longer disabled, they will identify the evidence relied upon to reach that conclusion.

such person would have been receiving had his or her benefits not been interrupted.

(iv) Following such review, persons who are notified of an initial determination that their benefits shall cease shall be given an opportunity to contest the determination and pending such review, they shall continue to receive aid as provided in current laws and regulations.

The Secretary's request for a partial stay and for a temporary stay, characterized by the government as an "emergency motion," was filed on Thursday, August 11, 1983--56 days after the district court issued the preliminary injunction and only four days before the Monday on which the Secretary was required to notify terminated recipients of their eligibility for reinstatement. This court received the lengthy papers and record in this case on Friday, August 12, 1983. On Saturday, August 13, we issued a six page order rejecting the Secretary's request for a temporary stay and declining to act "on an emergency basis" on the request for a partial stay. Our decision was based in part on the fact that the requirement that terminated recipients be notified by August 15, 1983 of their potential eligibility for benefits was the only immediate obligation imposed upon the government. We reasoned that the bulk of the administrative costs and the cost of reinstating benefits--the source of the injury which the Secretary argues justifies a stay--would not start to accrue until later, when the former recipients begin reapplying for benefits. Thus, we saw no necessity to issue a temporary stay or to grant a partial stay pending appeal on an "emergency" basis--especially given the Secretary's unexplained delay in seeking such relief.

On Monday, August 15, 1983, the Secretary, in compliance with paragraph (c)(i) of the district court's order, notified 28,557 members of the plaintiff class of their eligibility to reapply for disability benefits. The issue remaining before us is whether the Secretary must now comply with the remainder of paragraph (c). In other words, while the appeal from the preliminary injunction order is pending, must the Secretary reinstate benefits to those disabled persons who file applications, and may she then terminate those benefits only in accordance with the procedures required by our decisions in Patti and Finnegan ?

STANDARD OF REVIEW

The standard for evaluating stays pending appeal is similar to that employed by district courts in deciding whether to grant a preliminary injunction. See Nevada Airlines, Inc. v. Bond, 622 F.2d 1017, 1018 n. 3 (9th Cir.1980). In this circuit there are two interrelated legal tests for the issuance of a preliminary injunction. These tests are "not separate" but rather represent "the outer reaches 'of a single continuum.' " Los Angeles Memorial Coliseum Commission v. National Football League, 634 F.2d 1197, 1201 (9th Cir.1980). At one end of the continuum, the moving party is required to show both a probability of success on the merits and the possibility of irreparable injury. Id. See also Miss Universe, Inc. v. Flesher, 605 F.2d 1130, 1134 (9th Cir.1979). At the other end of the continuum, the moving party must demonstrate that serious legal questions are raised and that the balance of hardships tips sharply in its favor. Los Angeles Memorial Coliseum Commission, 634 F.2d at 1201; Miss Universe, 605 F.2d at 1134. "[T]he relative hardship to the parties" is the "critical element" in deciding at which point along the continuum a stay is justified. Benda v. Grand Lodge of International Association of Machinists, etc., 584 F.2d 308, 314-15 (9th Cir.1978), cert. dismissed, 441 U.S. 937, 99 S.Ct. 2065, 60 L.Ed.2d 667 (1979). In addition, in cases such as the one before us, the public interest is a factor to be strongly considered. See Warm Springs In this case, the Secretary seeks a stay pending appeal...

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