Ass'n of Administrative Law Judges v. Heckler

• Decision Date: 10 September 1984
• Docket Number: Civ. A. No. 83-0124.
• Citation: 594 F. Supp. 1132
• Parties: ASSOCIATION OF ADMINISTRATIVE LAW JUDGES, INC., Plaintiff, v. Margaret M. HECKLER, et al., Defendants.
• Court: U.S. District Court — District of Columbia

594 F. Supp. 1132

ASSOCIATION OF ADMINISTRATIVE LAW JUDGES, INC., Plaintiff, v. Margaret M. HECKLER, et al., Defendants.

Civ. A. No. 83-0124.

United States District Court, District of Columbia.

September 10, 1984.

Elliott L. Richardson, Peter E. Halle, Milbank, Tweed, Hadley & McCloy, Washington, D.C., for plaintiff.

Richard A. Levie, U.S. Dept. of Justice, Washington, D.C., for defendants.

MEMORANDUM OPINION AND ORDER

JOYCE HENS GREEN, District Judge.

Plaintiff, the Association of Administrative Law Judges, is a not-for-profit corporation whose members are administrative law judges (ALJs) employed by the Department of Health and Human Services (HHS) and assigned to the Office of Hearings and Appeals (OHA) of the Social Security Administration (SSA). Plaintiff's members adjudicate claims for disability benefits under Titles II and XVI of the Social Security Act, 42 U.S.C. §§ 401 et seq. (1982) and 42 U.S.C. §§ 1381 et seq. (1982). Plaintiff brought this lawsuit to challenge the "Bellmon Review Program", which defendants instituted to implement Section 304(q) of the Social Security Disability Amendments of 1980, the "Bellmon Amendment".¹ Plaintiff alleges that this program violates the rights of its members to decisional independence under the Administrative Procedure Act (APA), 5 U.S.C. § 551 et seq. (1982).

State agencies administer the Social Security Disability Insurance Program pursuant to agreements with the SSA. Based upon medical information received from various sources and applying SSA guidelines, the state disability determination service issues the decision of SSA. A claimant who is denied benefits may file for reconsideration at the state level and if dissatisfied may then seek relief on the federal level. The ALJ hearing is a de novo proceeding. The ALJ is the first agency personnel in the review process to interview the claimant in person. The claimant may submit additional evidence, produce expert witnesses, and be represented by counsel. If his or her claim is denied by the ALJ, the claimant may appeal to the Appeals Council, which is the last step in the administrative process.

The Appeals Council has the authority to review all decisions of ALJs, at its own discretion ("own motion"), or at the request of a claimant. In either case, the Appeals Council is authorized to exercise jurisdiction only when: (1) there appears to be an abuse of discretion by the ALJ; (2) there is an error of law; (3) the action, findings or conclusions of the ALJ are not supported by substantial evidence; or (4) there is a broad policy or procedural issue that may affect the general public interest. 20 C.F.R. § 404.970(a), 416.1470(a) (1984). Based upon its review, the Appeals Council may modify, affirm, reverse or remand the ALJ's decision. When the Appeals Council reverses or remands an ALJ's decision, it issues an opinion stating the grounds for reversal or remand and identifying dispositive abuses of discretion, errors of law, problems with conclusions of law and findings of fact, insufficiencies of evidence, and policy or procedural issues of concern to SSA. If a case is remanded, the ALJ must take any action ordered by the Appeals Council, but may also take any additional action that is not inconsistent with the remand order.

The Bellmon Amendment directed the Secretary of HHS to resume review of decisions of ALJs on her own motion. Congress expressed concern at that time about the high rate at which ALJs were reversing determinations made at the state level and the variance in these rates among ALJs. See H.R.Rep. No. 944, 96th Cong., 2d Sess. 57 (1980), reprinted in 1980 U.S.Code Cong. & Ad.News 1392, 1405; S.Rep. No. 408, 96th Cong., 2d Sess. 53 (1980), reprinted in 1980 U.S.Code Cong. & Ad.News 1277, 1331.

A study performed pursuant to the Bellmon Amendment and described in a report to Congress in January 1982 (PX-1), indicated that the Appeals Council more often would have changed decisions by ALJs allowing benefits made by ALJs with above average allowance rates than allowance decisions made by ALJs with average or below-average allowance rates.² The Bellmon Review Program, a series of measures designed to improve decisional quality and accuracy, began in October, 1981. Associate Commissioner of SSA, Louis B. Hays, announced that four categories of cases would be selected for possible "own motion" review:

                   (1) National random sample                21%
                   (2) Allowance decisions of new ALJs     |
                                                           |
                   (3) Decisions referred by SSA's Office  > 16%
                   of Disability Operations                |
                     Individual ALJs                          63%
                

Initially, individual ALJs with allowance rates of 70% or higher were to have 100% of their allowance decisions reviewed for accuracy and hearing offices with allowance rates of 74% or higher would also be reviewed. 106 ALJs, or approximately 13% of all ALJs in SSA, were placed on Bellmon Review because of their high allowance rates. The selection of entire hearing offices for review was soon discontinued. The other three categories of review were not yet operative.

An overview of the program was communicated to the ALJ corps in a Memorandum dated September 24, 1982 from Mr. Hays. (PX-111) ("Hays Memorandum"). That Memorandum explained that Bellmon Review was being instituted because of Congressional concern about high allowance rates and because only ALJ decisions denying benefits were generally subject to further review. Allowance rates were used as the basis for selecting the initial review group, in part, because studies had shown that decisions in this group would be the most likely to contain errors which would otherwise go uncorrected.

Based upon own-motion rates (the frequency with which the Appeals Council takes action to correct an ALJs decision, as calculated by the Office of Appraisal) the individual ALJs were divided into four groups: 100% review; 75% review; 50% review and 25% review. In determining whether an ALJ should be removed from review, the Appeals Council considered only decisional accuracy, defined as a 5% own motion rate for three consecutive months. An ALJ with a 5% own motion rate could be said to be 95% accurate. Shortly after implementation, the criteria for removing targeted ALJs from review were amended.³ The 5% own motion rate was abandoned in favor of an own motion rate approximating that of the national random sample.⁴

A companion system for providing individualized feedback and counseling on the results of the review was also described in the Hays Memorandum. Never implemented, this feedback system was intended to complement the case-by-case feedback which occurs through the process of reversals and remands by advising ALJs of "decisional weaknesses and providing a mechanism for achieving long term improvement." Plaintiff's members believed that the feedback memoranda developed for peer counseling sessions that were scheduled to be held in January 1983 would direct high allowance ALJs how to develop, hear and decide cases. No counseling sessions under this program were ever conducted. Defendants decided not to initiate the feedback proposal except with respect to ALJs who choose to participate.⁵

Finally, the Hays Memorandum advised that if, after further review an ALJ's performance had not improved, "other steps" would be considered. Understandably, plaintiff's members viewed that as a warning that OHA would recommend that charges be brought before the Merit Systems Protection Board (MSPB) seeking adverse personnel action, which could include dismissal. See testimony of Francis Mayhue, Robert B. Murdock.

The Bellmon Review Program has evolved substantially since the Hays Memorandum was issued. Significantly, in April 1982, before this lawsuit was filed, defendants stopped using allowance rates to target ALJs for Bellmon Review once own motion data became available.⁶ The ALJs whose allowance decisions were reviewed were selected for individual review solely on the basis of their own motion rates under the national random sample.

In mid-1983, OHA began to include in Bellmon Review unappealed decisions denying benefits by ALJs with high "grant-review" rates — the rates at which the Appeals Council grants claimants requests for review of denial decisions.⁷ This part of the program was not communicated to the ALJ corps at large,⁸ nor were written rules or procedures for this part of the program developed.

Most recently, OHA, under a new Associate Commissioner, has eliminated entirely the individual ALJ portion of Bellmon Review. Notice of Filing June 22, 1984, Memorandum to all ALJs, June 21, 1984. This Memorandum indicates that the number of cases reviewed under the national random sample will be increased. Apparently, the results of Bellmon Review demonstrated that the difference between the own motion rates of the selected ALJ and national random sample portions of the review had progressively narrowed, which suggested that overall, decisional quality and consistency had improved. The review of unappealed denial decisions by high grant-review ALJs has also been discontinued to be replaced by review of a national random sample of such decisions. These changes have been instituted on an interim basis only.

Plaintiff charged that the targeting of individual ALJs under Bellmon Review, based upon allowance rates and then own motion rates, was in essence an attempt to influence ALJs to reduce their allowance rates and thereby compromise their decisional independence.

The president of plaintiff Association, Charles Bono, sent a Mailgram to Associate Commissioner Hays (PX-110) in response to the Hays Memorandum requesting that the Bellmon Review Program be abandoned. Mr. Bono stated that the Bellmon Review Program would result in illegal performance ratings of ALJs and would have the effect of chilling ALJ decisional independence.⁹ Mr. Hays did not respond to this Mailgram.

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