Avery v. Secretary of Health and Human Services

• Decision Date: 05 March 1985
• Docket Number: No. 85-1135,85-1135
• Citation: 762 F.2d 158
• Parties: , 9 Soc.Sec.Rep.Ser. 402, Unempl.Ins.Rep. CCH 16,101 Ernest E. AVERY, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 158

762 F.2d 158

2 Fed.R.Serv.3d 71, 9 Soc.Sec.Rep.Ser. 402,

Unempl.Ins.Rep. CCH 16,101

Ernest E. AVERY, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellant.

No. 85-1135.

United States Court of Appeals, First Circuit.

Heard March 5, 1985.

Decided May 17, 1985.

Carolyn B. Kuhl, Deputy Asst. Atty. Gen., Washington, D.C., with whom Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., William F. Weld, U.S. Atty., Patti B. Saris, Asst. U.S. Atty., Boston, Mass., and William Kanter and Deborah Ruth Kant, Civ. Division-Appellate Staff, Washington, D.C., were on brief for appellant.

Judith Saltzman, Greater Boston Legal Services, Boston, Mass., with whom Sarah Anderson, and Linda Landry, Neighborhood Legal Services, Lynn, Mass., Laura Rosenthal, Boston, Mass., Massachusetts Law Reform Institute, and Jack Fisher, Cambridge & Somerville Legal Services, were on brief, for appellees.

Jamie W. Katz, Asst. Atty. Gen., Boston, Mass., with whom Francis X. Bellotti, Atty. Gen., Boston, Mass., was on brief for Com. of Mass.

Before COFFIN, BOWNES and BREYER, Circuit Judges.

BREYER, Circuit Judge.

Plaintiffs in this case are a class of Massachusetts residents who have received federal social security benefits for disabled people, see 42 U.S.C. Secs. 401 et seq. (Social Security Disability Insurance); id. Secs. 1381 et seq. (Supplemental Security Income). They sued the Secretary of Health and Human Services, claiming, among other things, that the Secretary was using an improper standard when deciding whether to continue or discontinue payment of disability benefits to a person already receiving them. They said the Secretary, at least sometimes, when deciding the 'continuation' question, would in effect reopen the question of whether the person had been disabled in the first place. The Secretary would then re-examine the initial disability decision, perhaps inferring from the same set of facts (in close cases) that the person had not ever been disabled and then denying the person continued benefits. Instead, plaintiffs argued, the Secretary ought to apply a "medical improvement" standard--a standard that would typically require continued payment in the absence of a medical change for the better. The Secretary used to apply this "medical improvement" test uniformly before the mid-1970's; then the Secretary changed to a stricter test allowing a type of de novo re-examination of disability. And, plaintiffs argued, the stricter 'de novo re-examination' test is unlawful.

In October 1984 while this suit was pending, Congress enacted a new law, the Social Security Disability Benefits Reform Act of 1984, Pub.L. No. 98-460, 98 Stat. 1794. The new law now requires the Secretary to use a more liberal "medical improvement" test when she decides whether to continue or discontinue disability benefits that are currently being paid. Congress was aware that many former recipients were currently challenging in the courts the lawfulness of the Secretary's stricter de novo re-examination policy and that several class actions had been filed. The new law said that judges with such cases before them should remand them to the Secretary and that the Secretary, where appropriate, should reconsider whether plaintiffs' benefits should continue, applying the liberal "medical improvement" standard when doing so. Id. Sec. 2(d).

After passage of the law, the district court made three decisions in this case that are the subject of this appeal. First, it re-examined its earlier definition of the relevant class of plaintiffs--a class it had defined as:

[a]ll SSI and SSDI beneficiaries residing in Massachusetts who have been or are receiving disability benefits and who, having presented claims of continuing disability, have been or will be disqualified from receiving benefits as a result of the Secretary's failure to adhere to a medical improvement standard when evaluating claims of continuing disability.

Avery v. Heckler, 584 F.Supp. 312, 322 (D.Mass.1984). The court denied the Secretary's motion to limit the class to persons whose claims the Secretary had denied after March 1, 1981. It made clear that the class extended to those persons described whose benefits the Secretary had terminated any time after June 1, 1976. Second, the court denied the Secretary's motion to dismiss the action. It remanded the claims of the class members to the Secretary while maintaining jurisdiction over the case. Third, the court examined the notice the Secretary proposed to send to members of the class--a notice telling them that they might be entitled to re-examination of a termination decision under the more liberal "medical improvement" test (and that they might be able to receive interim benefits under section 2(e) of the new Act pending re-examination). The court decided that the Secretary's notice was less clear than the notice that plaintiffs' counsel proposed, and it ordered the Secretary to send plaintiffs' counsel's notice instead. 599 F.Supp. 236 (D.Mass.1984). The court also ordered the parties to follow certain related procedures for determining who is, and who is not, a member of the class.

The Secretary has appealed from these district court determinations. She asked us for a stay pending appeal, which we granted in part on February 13, 1985, because we were uncertain of the merits of her 'class definition' argument. After full briefing and oral argument in this court, we concluded that the district court's decisions were legally correct, and on March 21, 1985 we dissolved the stay. We shall explain here the basis for our conclusion.

1. At the outset we note that plaintiffs contend that the relevant district court orders are not now appealable. We agree with the Secretary, however, that at least one set of the orders is equivalent to an injunction and therefore appealable under 28 U.S.C. Sec. 1292(a)(1), which gives us jurisdiction to hear appeals from:

[i]nterlocutory orders of ... district courts ... granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court.

Here, the district court ordered the Secretary to issue certain specific notices and to follow certain set procedures for determining class membership. To determine whether these orders are of the sort to justify interlocutory review, we must examine their "substantial effect" rather than their terminology. United States v. Cities Service Co., 410 F.2d 662, 663 n. 1 (1st Cir.1969); United States v. Alcon Laboratories, 636 F.2d 876, 881 (1st Cir.), cert. denied, 451 U.S. 1017, 101 S.Ct. 3005, 69 L.Ed.2d 388 (1981).

First, we note that the orders in question compel affirmative agency conduct, impose at least some burden upon the Secretary, and are enforceable by contempt sanctions. See 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure: Jurisdiction Sec. 3922 (1977). Second, these orders are not purely "a matter of [litigation] procedure rather than remedy," id., for the district court's decision to impose these orders instead of dismissing the case outright is reasonably viewed as deciding what substantive relief the new Act affords. Compare Polyplastics, Inc. v. Transconex, Inc., 713 F.2d 875, 880 (1st Cir.1983). Third, by the time the district court enters a final order terminating this litigation, the 'notice' and 'procedure' questions may well be moot and therefore evade appellate review. See Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 252, 99 L.Ed. 233 (1955) (purpose of Sec. 1292 was to "permit litigants to effectually challenge interlocutory orders of serious, perhaps irreparable, consequence"). In sum, both as a matter of form and in terms of the purposes of section 1292(a), we believe it proper in the context of this litigation to treat the 'notice' and 'procedure' orders as injunctive relief that is appealable on an interlocutory basis. See generally 16 C. Wright, A. Miller, E. Cooper & E. Gressman, supra, Secs. 3920-24.

We need pursue this jurisdictional matter no further, for appeal of the 'notice' and 'procedure' orders is, in effect, an appeal of all the central issues of the case. These orders are legally proper in their entirety only if 1) the class may be defined to include persons whose disability payments the Secretary terminated between June 1976 and March 1981; and 2) the new 1984 law does not require the court to dismiss the case; and 3) the court has the legal power to issue these particular orders requiring certain notice and membership-determining procedures. Our decision that these orders are legally proper means that the Secretary would lose any appeal separately challenging the district court's decision about class membership or its decision not to dismiss the case. Hence, there is no need to determine separately the appealability of the orders encompassing those decisions. See Payne v. Travenol Laboratories, Inc., 673 F.2d 798, 808-09 (5th Cir.) (interlocutory review of class definition appropriate when contours of class composition shape contours of injunctive relief), cert. denied, 459 U.S. 1038, 103 S.Ct. 451, 74 L.Ed.2d 605 (1982); Kershner v. Mazurkiewicz, 670 F.2d 440, 448-49 (3d Cir.1982) (same); Deckert v. Independence Shares Corp., 311 U.S. 282, 287, 61 S.Ct. 229, 232, 85 L.Ed. 189 (1940) (denial of motion to dismiss may, in appropriate cases, be reviewed by appellate court in Sec. 1292(a)(1) appeal of injunctive relief); see generally 16 C. Wright, A. Miller, E. Cooper & E. Gressman, supra, Sec. 3921 (Sec. 1292(a)(1) review "quite properly extends to all matters inextricably bound up with the remedial decision").

2. The Secretary argues that the district court lacked the legal power to include within the class of plaintiffs persons whom the Secretary removed from the disability rolls between June, 1976 and March, 1981....