Bivines v. Bowen, 87-7037

• Decision Date: 04 December 1987
• Docket Number: No. 87-7037,87-7037
• Parties: , Unempl.Ins.Rep. CCH 17,689 Shelia BIVINES, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services of the United States, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 293

833 F.2d 293

19 Soc.Sec.Rep.Ser. 581, Unempl.Ins.Rep. CCH 17,689

Shelia BIVINES, Plaintiff-Appellant, v. Otis R. BOWEN, Secretary of Health and Human Services of the United States, Defendant-Appellee.

No. 87-7037.

United States Court of Appeals Eleventh Circuit.

Dec. 4, 1987.

Janet P. Cox, Birmingham, Ala., for plaintiff-appellant.

Frank W. Donaldson, U.S. Atty., Jenny L. Smith, Asst. U.S. Atty., Birmingham, Ala., Maire T. Ransley, U.S. Dept. of Health & Human Services, Atlanta, Ga., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before RONEY, Chief Judge, HATCHETT, Circuit Judge, and HODGES ^*, Chief District Judge.

HATCHETT, Circuit Judge:

In this social security appeal, we are called upon to determine whether the principle and rationale announced in Kennedy v. Bowen, 814 F.2d 1523 (11th Cir.1987), apply to a slightly different factual situation. Holding that Kennedy applies, we reverse and remand.

On August 21, 1981, in an effort to obtain disability insurance benefits, appellant, Sheila Bivines, submitted an application to the Social Security Administration (Administration), alleging an inability to engage in substantial gainful employment as of June 11, 1978, due to narcolepsy. After her claims were denied at the initial and reconsideration levels, an administrative law judge (ALJ) determined that Bivines suffered from narcolepsy and a psychiatric disorder which prevented the performance of substantial gainful activity. Accordingly, the ALJ found Bivines under a "disability" beginning June 1, 1978. Satisfied with the ALJ's determination as to the onset date of disability, but aggrieved with the fact that her benefits would be retroactive only to August, 1980, Bivines filed a timely application for Appeals Council review. In her appeal, Bivines addressed only the issue of whether her cash benefits should have been retroactive to June 11, 1978, the onset date of her disability, rather than the August, 1980, date which had been determined by the Administration. ¹

On February 15, 1984, fifteen months after her initial request, the Appeals Council notified Bivines that her request for review had been granted. Because Bivines had moved, she did not receive notice of the Appeals Council's decision to review her award. Even though Bivines had moved, she did, however, report her changes of address to the Administration and continued to receive notices from lower levels of the Administration which reflect that her changes of address had been acknowledged.

On May 3, 1984, without giving notice to Bivines of its intent to revisit aspects of the ALJ's decision which she had not challenged the Appeals Council revised the substantive portion of the ALJ's decisions. The revision resulted in a finding that Bivines was entitled to an onset date of disability commencing on September 15, 1982, instead of the June, 1978, date the ALJ had determined.

Because Bivines had been in payment status since August, 1980, she had received monthly payments from that date through February, 1983, when the Appeals Council made its decision. Thus, she was found overpaid in that amount. In addition, because her benefit rate was recomputed to reflect the new onset date of disability, September, 1982, her monthly benefits were decreased approximately $200 per month. Bivines was unaware of the Appeals Council's action until she received a letter at her correct address on September 3, 1984, informing her of the overpayment and requesting immediate repayment. ²

After learning of the Appeals Council's action, Bivines immediately filed an action in the district court. Because the tape recording of the hearing before the ALJ was inaudible, and therefore could not be transcribed, the district court granted the Secretary's motion to remand the case for further consideration. ³ Upon remand, the claim was assigned to a second ALJ for further proceedings. After another full hearing and review of the entire record, the second ALJ issued a decision consistent with that of the first ALJ that Bivines's onset date of disability commenced on June 11, 1978.

The Appeals Council subsequently vacated the findings of the second ALJ and reinstated the prior determination of the Appeals Council that Bivines became disabled on September 15, 1982. Again, Bivines requested district court review. The district court entered an order affirming the decision of the Secretary, from which Bivines now appeals.

The Secretary contends that because Bivines received completely new hearings before a second ALJ and the Appeals Council, these new hearings sufficed to cure the problems caused by the original defects in notice. Consequently, the Secretary argues that our holding in Kennedy should not apply.

Our decision in Kennedy is dispositive of this appeal. At issue in Kennedy was what notice, if any, was due in the case of an appeal initiated by a claimant when the Appeals Council decided to revisit, on its own initiative, an issue decided favorably to the claimant that the claimant had not challenged on appeal. Kennedy, 814 F.2d at 1525. In underscoring the importance of notice in a claimant-initiated appeal, we stated:

A partially successful claimant, not given reason to believe that a favorable portion of the decision below is at risk, will direct his or her appeal to that portion of the decision that was unfavorable. ... When an Appeals Council sua sponte and without notice expands the scope of its review in this manner, the Council typically finds the claimant off guard and unprepared. Understandably, the claimant has not tendered evidence in support of the favorable finding nor has the claimant addressed the unanticipated legal issues in his or her brief. Such action not only severely disadvantages the claimant's case, it also works to the detriment of the Appeals Council. The reliability of a council's decisions is undermined when a council decides an appeal on less than all the relevant evidence and legal arguments as is the case when a council acts in this manner.

Kennedy, 814 F.2d at 1526.

Applying these principles, we held that where a claimant makes a timely application for review of a limited issue, such as the date of onset of disability, the Appeals Council may not on its own initiative undertake a broader review of the ALJ's decision without giving the claimant notice of its intention to do so. Kennedy, 814 F.2d at 1527.

In so holding, we acknowledged that "our mere recognition of the advantages of notice in this situation, however, is not authority for the proposition that such notice must be given." Kennedy, 814 F.2d at 1526. Rather, we observed that a notice requirement, if any, must have its genesis in the regulations of the Social Security Administration. Moreover, we reiterated the well-established principle that courts must generally accord substantial deference to an administrative agency's interpretation of its own regulations. Kennedy, 814 F.2d at 1526; see also United States v. Larionoff, 431 U.S. 864, 872-73, 97 S.Ct. 2150, 2155-56, 53 L.Ed.2d 48 (1977); Powell v. Heckler, 789 F.2d 176, 178 (3d Cir.1986). As the Third Circuit noted in Powell, however, the deference which we accord administrative agencies is tempered by the fact that our duty to protect due process and fundamental fairness is paramount to the agency's otherwise untrammeled right to implement its self-promulgated procedures. See Powell, 789 F.2d at 178; Kennedy, 814 F.2d at 1526.

Turning now to the regulations, we note that Bivines sought review of the ALJ's decision pursuant to 20 C.F.R. Secs. 404.967 and 404.968. ⁴ These sections, which provide for claimant-initiated review, allow a dissatisfied claimant to request review before the Appeals Council within sixty days after the decision of the ALJ. These sections further provide that the Council has the discretion to deny the request, to grant the request, to issue a decision, or to remand the case to an ALJ. In either case, the Appeals Council...