Briggs v. Sullivan

• Decision Date: 25 September 1989
• Docket Number: No. 89-15515,89-15515
• Citation: 886 F.2d 1132
• Parties: , Unempl.Ins.Rep. CCH 14915A Charles BRIGGS, et al., Plaintiffs-Appellants, v. Louis W. SULLIVAN, M.D., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1132

886 F.2d 1132

27 Soc.Sec.Rep.Ser. 313, Unempl.Ins.Rep. CCH 14915A

Charles BRIGGS, et al., Plaintiffs-Appellants, v. Louis W. SULLIVAN, M.D., et al., Defendants-Appellees.

No. 89-15515.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 30, 1989.

Decided Sept. 25, 1989.

Curtis L. Child, Legal Services of Northern California, Sacramento, Cal., for plaintiffs-appellants.

Edmund F. Brennan, Asst. U.S. Atty., Sacramento, Cal., for defendants-appellees.

Appeal from the United States District Court for the Eastern District of California.

Before TANG, REINHARDT and WIGGINS, Circuit Judges.

REINHARDT, Circuit Judge:

Charles Briggs suffers from a disabling mental impairment, a condition which renders him eligible to receive disability payments from the federal government. Because of the nature of his impairment, the Secretary of Health and Human Services, appellee Louis Sullivan ("the Secretary"), has decided that his federal benefits payments should be paid to a representative, who would act essentially as a trustee for Briggs, paying his basic expenses and giving him money as necessary and prudent. Robert Pierce, another appellant in this case, is also disabled. Because his benefits constitute "Supplemental Security Income payments" and because his disability stems in part from alcohol or drug addiction, the Secretary is required by statute to make the payments in which he is entitled to a representative rather than to him directly.

Briggs, Pierce, and the other appellants in this action have either been unable to find representatives satisfactory to the Secretary and have thus received no payments, or have had their payments suspended when, for a variety of reasons, their current representatives could no longer continue in that role. In several instances, beneficiary-appellants have been robbed or otherwise exploited by their representatives and have asked the Secretary to stop paying their benefits to a particular representative or to any representative at all. In every case where a beneficiary-appellant currently lacks a representative, however, the Secretary has suspended the payment of benefits altogether, refusing to pay them directly to the beneficiary and awaiting the designation of a new representative. The Secretary has promulgated a policy under which payments can be suspended for a period of up to ninety days, although in an undetermined number of cases (including Briggs') payments have been withheld for a substantially longer period.

Briggs, and others similarly situated to him, sued in district court to compel the Secretary to pay their benefits directly to them while they sought a representative, or a replacement for a previous representative. Pierce, and others similarly situated to him, sought a similar order and also sought to compel the Secretary to designate suitable "representatives" for them. The district court certified the appellants as a class under Fed.R.Civ.P. 23 but denied their request for a preliminary injunction. A motions panel of this court subsequently granted a partial stay pending appeal, which enjoined the Secretary from refusing to pay benefits directly to those beneficiaries who had no representatives. Because we conclude that the class met the requirements for a preliminary injunction with respect to the Secretary's failure to make benefits payable directly to Briggs and to the other class members who are not suffering from disabilities stemming from drug or alcohol addiction, we reverse in part and remand to the district court for entry of an appropriate injunction.

I

The lattice of statutes, regulations and procedures which determines the conditions under which the Secretary awards assistance payments is an intricate, even confusing, one. In this case, indeed, there is an extra level of complexity, for there are two separate statutory schemes, with different criteria governing payment to someone other than the beneficiary ("representative payment," in the parlance of the Secretary), at issue here. While we shall try to make our discussions as concise as possible, we must sketch the background to this appeal with some detail. We therefore proceed to describe in turn: the statutory and regulatory framework governing representative payment; the effects which the appellants alleged the Secretary's payment policies have on them, and finally the course of litigation to this point.

A. Representative Payment

The Byzantine system of rules which governs an individual's eligibility for federal assistance payments, and the manner of payment itself, consists of three levels of written directives. Paramount are the federal entitlement statutes themselves; for our purposes we are concerned with certain provisions of the Social Security Act ("the Act"), 42 U.S.C. Sec. 301 et seq., as amended. The next tier is the regulatory one, consisting of formal agency rules promulgated by the Social Security Administration of the Department of Health and Human Services. Finally, and highly relevant in this case, there are the procedural directives of the Social Security Administration's "Program Operations Manual System," known to those who must decipher it as the "POMS." We must discuss each tier in some depth.

There are two types of benefits at issue in this case: Social Security payments, which we term "Title II" benefits, and Supplemental Security Income payments, which we term "Title XVI" benefits. ¹ Under the Act, as a general rule, benefits are paid directly to the individual deemed eligible to receive them. However, in cases in which the Secretary determines that the would-be recipient of benefits is unable competently to manage his affairs, or that it is otherwise in "the interest of an applicant entitled to payment," the Secretary can make the benefits' payments to a representative of the actual beneficiary. 42 U.S.C. Sec. 405(j)(1)-(2) (Title II), Sec. 1383(a)(2) (Title XVI). By contrast, for one specific class of payees relevant here, that of individuals who receive Title XVI benefits because of a disability due to alcohol or drug dependency, the rule is different. Congress has explicitly required that in every such case, those benefits be paid to a representative of these individuals and not to the recipient directly. 42 U.S.C. Secs. 1383(a)(2)(A), 1382(e)(3)(A).

Although they give the Secretary the option of paying benefits to a representative rather than the beneficiary in all but the Title XVI alcohol and drug dependency cases, Secs. 405 and 1383 do not describe in any detail a procedure for determining when it is in "the interest of an applicant" to have benefits paid to another person or how such persons should be selected. Accordingly, the Secretary has promulgated regulations governing representative payment procedures. It is important to note at this point that the Act contains no provision or exception excusing the Secretary from making payments to non-alcohol or drug disabled recipients pending appointment or replacement of a representative.

The regulations that the Secretary has promulgated regarding Title II and Title XVI benefits essentially mirror each other. Compare 20 C.F.R. Secs. 404.2001-404.2065 (1988) with 20 C.F.R. Secs. 416.601-665 (1988). Each contains provisions detailing: the circumstances under which a representative will be deemed necessary; the process for selecting representative payees, and the responsibilities of representative payees. 20 C.F.R. Secs. 404.2001-404.2045, 416.601-45. The regulations also contain a mechanism under which a beneficiary can demonstrate that he no longer needs a representative and can receive benefits directly. 20 C.F.R. Secs. 404.2055, 416.655. Additionally, the regulations provide that, in cases in which a beneficiary's current representative has misused funds entrusted to him, has died, wishes to discontinue his service as a representative, or fails to comply with the Secretary's standards in any other way, the Secretary will "try to find a new payee." 20 C.F.R. Secs. 404.2050, 416.650. As is the case with respect to the provisions of Title 42 discussed above, nothing in the Secretary's regulations authorizes the Secretary to withhold or discontinue paying benefits during the period in which he is "find[ing] a new payee," that is, the time when a beneficiary is without a representative.

Finally, we come to the turgid provisions of the POMS. This document, which apparently used to be more simply termed the "Claims Manual," see Powderly v. Schweicker, 704 F.2d 1092, 1096 (9th Cir.1983), is, in the words of the Secretary, the Social Security Administration's "authorized means for issuing written program instructions for adjudicating claims and performing its mission." The POMS portions relevant here parrot the provisions of the Federal Register described above and then, in a section entitled "Payee Selection and Development Issues," go further. POMS section 00504.100 states that, "pending payee development," (a phrase which apparently refers to the period in which a person who has already met the Secretary's substantive criteria for benefits is, for whatever reason, without a representative) the Secretary will "defer[ ] or suspend[ ]" benefits for a period of not more than 90 days. However, for beneficiaries who are legally incompetent or who receive Title XVI benefits due to alcohol or drug dependency, payments are deferred or suspended for as long as it takes to locate a satisfactory representative. Id. It appears from the POMS that the Secretary has instructed workers in the Social Security field offices to take affirmative efforts to locate representatives for those whose payments have been cut off. See POMS sections 00502.300; 00504.100(B). ²

It is thus clear that the principal practice which appellants seek to enjoin is one mandated, not by statute or rule, but by the POMS. We discuss the significance of this fact infra, in Section IIB.

B. No Representative--No Payment

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