Cordoba v. Massanari, 99-2278

• Decision Date: 20 July 2001
• Docket Number: No. 99-2278,99-2278
• Parties: (10th Cir. 2001) ARMANDO A. CORDOBA; INDEPENDENT PARALEGAL SERVICE, INC., DOING BUSINESS AS DISABILITY ADVOCACY CLINIC, PLAINTIFFS - APPELLANTS, v. LARRY G. MASSANARI, <A HREF="#fr1-*" name="fn1-*">* ACTING COMMISSIONER OF THE SOCIAL SECURITY ADMINISTRATION, DEFENDANT - APPELLEE. NATIONAL FEDERATION OF PARALEGAL ASSOCIATIONS, AMICUS CURIAE
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1044

256 F.3d 1044 (10th Cir. 2001)

ARMANDO A. CORDOBA; INDEPENDENT PARALEGAL SERVICE, INC., DOING BUSINESS AS DISABILITY ADVOCACY CLINIC, PLAINTIFFS - APPELLANTS, v. LARRY G. MASSANARI,^* ACTING COMMISSIONER OF THE SOCIAL SECURITY ADMINISTRATION, DEFENDANT - APPELLEE.

NATIONAL FEDERATION OF PARALEGAL ASSOCIATIONS, AMICUS CURIAE.

No. 99-2278

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

July 20, 2001

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO (D.C. NO. CIV-96-1393-MV/RLP)

Dennis W. Montoya of Montoya Law Offices, Rio Rancho, New Mexico, for Plaintiffs-Appellants.

August E. Flentje, Attorney, Appellate Staff Civil Division, Department of Justice, Washington, D.C., (David W. Ogden, Acting Assistant Attorney General; William Kanter, and Howard S. Scher, Attorneys, Appellate Staff Civil Division, Washington, D.C.; John J. Kelly, United States Attorney, Albuquerque, New Mexico, with him on the briefs), for Defendant-Appellee.

Martha A. Churchill, Milan, Michigan, filed a brief on behalf of the amicus curiae.

Before Tacha, Chief Judge, Reavley,^** and Lucero, Circuit Judges.

Reavley, Senior Circuit Judge.

Appellants Armando Cordoba and Independent Paralegal Services, Inc. (collectively Cordoba) provide non-attorney representation to clients seeking social security benefits. The Social Security Act allows for such non-attorney representation. See 42 U.S.C. § 406. Cordoba brought this suit after the Social Security Administration (SSA) rejected numerous fee agreements he had submitted for approval, resulting in a loss of fees.

The statutory and regulatory scheme which governs the payment of fees to representatives of social security claimants draws certain distinctions between attorneys and non-attorneys. For example, the SSA is authorized to pay an attorney his fees directly from the past-due benefits due a claimant. See 46 U.S.C. § 406(a)(4)(A). An SSA regulation provides that the SSA will pay an attorney his authorized fee directly from past-due benefits, but that the SSA assumes no responsibility for the payment to a non-attorney of fees it has authorized. 20 C.F.R. § 404.1720(b)(4) (2000).¹

Cordoba alleged that the statutory and regulatory scheme unconstitutionally discriminates against non-attorneys, and that certain regulations had been promulgated in violation of the notice and comment rulemaking requirements of the Administrative Procedure Act (APA), 5 U.S.C. § 553. The district court considered challenges to four provisions of the SSA's "Hearings, Appeals and Litigation Law Manual" (known as HALLEX). The district court held, and the Commissioner of Social Security does not contest, that two provisions were "substantive" rather than "interpretive," and hence subject to the notice and comment provisions of the APA. See id. § 553(b)(3)(A) (providing that notice and comment requirements do not apply to "interpretative rules"); Rocky Mountain Helicopters, Inc. v. FAA, 971 F.2d 544, 546-47 (10th Cir. 1992) (explaining that notice and comment rulemaking requirements apply to "substantive" rules but not to "interpretive" rules).

A. Jurisdiction of Cordoba's Statutory Claims

As we understand Cordoba's appellate briefing, he complains that the district court erred in dismissing his substantive constitutional claims, and in declining to grant certain requested equitable relief once it found a violation of the APA.² We discuss the equal protection claim below. On the claims other than the constitutional claims, we agree with the district court that the only jurisdiction it had was limited jurisdiction to issue mandamus relief. Although the case presents questions of federal law, the Social Security Act provides that "[n]o action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter." 42 U.S.C. § 405(h). Section 405(h) has been broadly interpreted to bar federal district court suits involving social security claims, where jurisdiction is allegedly based on general federal question jurisdiction. See Weinberger v. Salfi, 422 U.S. 749, 757-62 (1975). Further, in Califano v. Sanders, 430 U.S. 99, 105-07 (1977), the Court held that the APA does not provide an independent source of subject matter jurisdiction.

We also agree with the district court that federal court jurisdiction under 42 U.S.C. § 405(g) does not extend to this case. Section 405(g), by its terms, would only apply if Cordoba were a "party" to a final agency decision of the Social Security Administration "made after a hearing." However, § 406(a) sets out the statutory procedures for non-attorney representatives, and § 406(a)(3)(C) states that fee determinations by the agency are final. Considering both § 405 and § 406, a claimant's representative should not be considered a "party" under section § 405(g). Further, Cordoba concedes in his supplemental brief that "[s]section 405(g) review is not available to Mr. Cordoba and Independent Paralegal Services. The decision on representative fees is made without a hearing, [and] therefore is `not a final decision of the Commissioner made after a hearing' to which Appellants were a party."

On the statutory claims, therefore, the only source of district court jurisdiction is the limited jurisdiction provided under the federal mandamus statute, 28 U.S.C. § 1361. We recognized such jurisdiction in Ryan v. Shea, 525 F.2d 268, 272 (10th Cir. 1975).³ Such mandamus jurisdiction exists "for a plaintiff only if he has exhausted all other avenues of relief and only if the defendant owes him a clear non-discretionary duty." Heckler v. Ringer, 466 U.S. 602, 616 (1984).

In ruling on the cross-motions for summary judgment, the district court properly refused to order the Social Security Administration to approve Cordoba's previously denied fee agreements or other requested injunctive relief, because Cordoba failed to offer proof that he had exhausted all other avenues of relief before the agency. In particular, the district court noted that, under 20 C.F.R. § 404.1725 (2000), the representative may file a fee petition for a fee award after the Social Security Administration initially refuses to enforce a fee agreement. The court noted that Cordoba, in the cross-motions for summary judgment, did not show that he had pursued this administrative remedy.⁴

B. Jurisdiction of Cordoba's Constitutional Claim

We are left with Cordoba's equal protection claim. As discussed above, the Social Security Act and regulations thereunder draw some distinctions between attorneys and non-attorneys. Over this constitutional claim, we are persuaded that the district court had general federal question jurisdiction under 28 U.S.C. § 1331.

Despite the language of § 405(h), discussed above, the Supreme Court has recognized that general federal question jurisdiction exists over certain constitutional claims relating to social security matters. Whether an exception to § 405(h) exists for colorable constitutional claims was discussed by the Supreme Court in Califano v. Sanders, 430 U.S. 99 (1977), where the Court, in explaining prior case law, recognized the "well-established principle that when constitutional questions are in issue, the availability of judicial review is presumed, and we will not read a statutory scheme to take the extraordinary step of foreclosing jurisdiction unless Congress' intent to do so is manifested by clear and convincing evidence." Id. at 109 (internal quotation marks omitted).

More recently, in Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000), the Court addressed whether a district court had federal question jurisdiction to hear a challenge to certain Medicare regulations. The regulations allegedly violated constitutional and statutory requirements. Id. at 7. A provision of the Medicare Act incorporated § 405(h). The Court held that § 405(h) deprived the district court of federal question jurisdiction. Illinois Council interpreted Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667 (1986), as holding that § 1331 federal question jurisdiction would exist if without it "application of § 405(h) would not simply channel review through the agency, but would mean no review at all." Illinois Council, 529 U.S. at 19. Michigan Academy, however, only recognized a presumption of judicial review, which may be rebutted by "specific congressional intent to preclude judicial review." 476 U.S. at 673. In the pending case, § 406(a)(3)(C), discussed above, provides that review of a fee agreement by an administrative law judge "shall not be subject to further review," and arguably manifests congressional intent that there should be no judicial review of fee determinations.

After careful consideration, however, we are persuaded that the Social Security Act, and § 406(a)(3)(C) in particular, do not manifest "specific" congressional intent under Illinois Council, or "clear and convincing" evidence of congressional intent under Sanders, that a constitutional claim of the sort Cordoba raises should not be cognizable in federal court. Section 406(a)(3)(C) concerns the procedures whereby an administrative law judge reviews the maximum fee allowed under the fee agreement procedure for obtaining fees. The fee agreement procedure is one of two procedures whereby fee can be recovered, the other being the fee petition procedure, see 42 U.S.C. § 406(a)(1); 20 C.F.R. § 404.1725 (2000). We do not read the procedures set out in § 406(a)(3)(C) as manifesting specific or clear and convincing congressional intent that Cordoba cannot challenge in federal court, on equal protection grounds, the regulatory scheme itself, rather than the fee awarded in a particular case under the extant scheme. See Buchanan v. Apfel, 249 F.3d 485, 490 (6th Cir. 2001) (distinguishing, for purposes of § 405(h), between "whether Congress intended to...