Culbertson v. Secretary of Health and Human Services

• Decision Date: 18 October 1988
• Docket Number: No. 88-1531,88-1531
• Citation: Culbertson v. Secretary of Health and Human Services, 859 F.2d 319 (4th Cir. 1988)
• Parties: , Unempl.Ins.Rep. CCH 14218A Sandra CULBERTSON, Plaintiff-Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 319

859 F.2d 319

23 Soc.Sec.Rep.Ser. 351, Unempl.Ins.Rep. CCH 14218A

Sandra CULBERTSON, Plaintiff-Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee.

No. 88-1531.

United States Court of Appeals Fourth Circuit.

Argued June 6, 1988.

Decided Oct. 18, 1988.

John Bagnel Duggan (Edwards, Duggan, Reese and McKinney, P.A., Greer, S.C., on brief), for plaintiff-appellant.

Daniel Gerard Reidford, Asst. Regional Counsel (Bruce R. Granger, Chief Counsel, Mack A. Davis, Deputy Chief Counsel for Social Sec. Disability Litigation and Programs, Washington, D.C., Haila Kleinman, Asst. Regional Counsel, David L. Stephens, Asst. Regional Counsel, Dept. of Health and Human Services, Richard K. Willard, Asst. Atty. Gen., Washington, D.C., Vinton D. Lide, U.S. Atty., Columbia, S.C., on brief), for defendant-appellee.

Before HALL, MURNAGHAN, and WILKINS, Circuit Judges.

K.K. HALL, Circuit Judge:

Sandra Culbertson, a claimant seeking an award of disabled child benefits under Title II of the Social Security Act, appeals an order of the district court remanding her case to the Secretary for further administrative proceedings. We conclude that the district court's order operates as a final denial of benefits to which Culbertson has demonstrated an entitlement. Accordingly, we reverse and remand.

I.

Culbertson was born on March 12, 1945, and has been mentally retarded since birth. As a result of her mental impairment, she has remained dependent upon her parents despite reaching the age of legal maturity. She has not, however, been adjudicated as incompetent nor is she under the authority of a guardian ad litem.

On January 6, 1976, Culbertson's father, Lewis, filed on her behalf an application for disabled child's benefits pursuant to Title II of the Social Security Act, 42 U.S.C. Sec. 402(d). The application was denied administratively on February 27, 1976. Culbertson took no action to appeal that denial.

On October 11, 1977, Culbertson filed a second application for Title II benefits alleging, as she had in the first application, that she had been mentally disabled since birth. The second application was also denied at the initial administrative level. Claimant, who was not represented by legal counsel with regard to either the first or second application, did not seek reconsideration or an administrative hearing in which she could contest the Secretary's decision.

Culbertson filed her third and most recent application for benefits on September 22, 1980. Following another administrative denial, she obtained legal counsel and entered the appeals process. A hearing before an administrative law judge ("ALJ") was held on July 9, 1981, at which time Culbertson, her parents and Dr. Charles White, a psychiatrist, testified. After considering that testimony as well as certain corroborating documentation, the ALJ concluded that Culbertson had proved the existence of "an overwhelming nonexertional impairment which rendered her disabled prior to age 22." The ALJ determined, therefore, that she was not only entitled to an award with regard to her most recent application but, also, that the Secretary's February 27, 1976, decision to deny benefits should be reopened and revised to grant benefits based on the January 6, 1976, application.

At this juncture, the Appeals Council, sua sponte reviewed the ALJ's decision and reversed the award based on Culbertson's 1976 application. The Council reasoned that an administrative determination more than four years old could not be reopened. In the Council's view, the Secretary's regulation, 20 C.F.R. Sec. 404.988, rendered such an adverse determination conclusively final. ¹

In accordance with the Appeals Council's order remanding Culbertson's case for further proceedings, a supplemental administrative hearing was held. The ALJ again concluded that claimant suffered from a severe mental impairment which had begun before she attained the age of 22 and had continually prevented her from engaging in substantial gainful activity. The ALJ further determined that Culbertson's mental and emotional impairments had prevented her from pursuing her appeal rights with regard to the 1976 application. The ALJ once more awarded benefits based on claimant's first application.

For the second time, the Appeals Council, on its own initiative, reviewed the favorable determination of the ALJ. Although agreeing that the evidence demonstrated the existence of claimant's disability prior to her twenty-second birthday on March 12, 1967, the Council concluded that retroactive benefits could be awarded only with regard to Culbertson's second application of October 11, 1977. In reaffirming its previous refusal to reopen the 1976 denial of benefits, the Council further concluded that the ALJ had addressed constitutional issues beyond the scope of his authority when he considered Culbertson's ability to pursue her rights in 1976.

Culbertson subsequently initiated the instant action in district court seeking judicial review of the Appeals Council decision. The court determined that meaningful review was not immediately possible due to certain inadequacies in the transcript of the administrative hearing. The court, therefore remanded the case to the Secretary for an expedited supplemental hearing.

Culbertson's third administrative hearing was conducted on May 8, 1985, after which the ALJ once more determined that benefits should be awarded based on her 1976 application. The ALJ reasoned that claimant clearly lacked the intellectual ability and emotional maturity necessary to assert her rights in 1976. Citing this Court's decision in Shrader v. Harris, 631 F.2d 297 (4th Cir.1980), the ALJ concluded that the Secretary's refusal to reopen the application of a mentally impaired claimant on the basis of "res judicata" ² offended "fundamental doctrines of fairness and equity."

For the third time, the Appeals Council reviewed and overruled the decision of the ALJ. The Council held that the disposition of Culbertson's 1976 application raised an issue of administrative finality under 20 C.F.R. Sec. 404.988 rather than the bar on relitigation posed by the doctrine of res judicata. Rejecting thereby the ALJ's citation of legal precedent, and concluding that the 1976 denial was final, the Council modified the ALJ's decision to award benefits only on Culbertson's 1977 claim.

Culbertson's challenge to the Secretary's final decision again returned to the district court where it was twice referred to a United States magistrate for report and recommendation. On both occasions the magistrate recommended that claimant be awarded benefits based on her 1976 application. Like the ALJ, the magistrate reasoned that the Secretary's refusal to reconsider Culbertson's first application operated as a denial of due process. The district court, however, concluded that it was the mental competence of Culbertson's father who had filed the initial application that controlled any due process analysis of the Secretary's decision. Accordingly, the court rejected the magistrate's recommendation and remanded the case to the Secretary for consideration of the mental competence of claimant's father in 1976. ³

This appeal followed.

II.

When deciding whether to reopen or to reconsider his own administrative determinations, the Secretary enjoys broad discretion, which is generally not subject to judicial review. Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). Appellate jurisdiction is invoked only when the Secretary's refusal to reopen raises a question of constitutional significance. Id. at 109, 97 S.Ct. at 986. This Court, however, did perceive such a constitutional question when the Secretary attempted to invoke the procedural bar of res judicata against a mentally impaired pro se claimant. Shrader, supra. In Shrader, we held that an adverse determination made in an ex parte proceeding involving a claimant who lacked the mental competence to pursue an administrative appeal could not be accorded res judicata status without violating the claimant's right to due process. Shrader, 631 F.2d at 301-02.

Culbertson's principal contention on appeal is that the Secretary's refusal to reexamine her 1976 application is contrary to the Shrader doctrine. ⁴ She also argues that her mental competence is the controlling factor and that the district court's remand for consideration of her parents' ability is based upon a misinterpretation of our ruling in Robinson v. Heckler, 783 F.2d 1144 (4th Cir.1986). We find appellant's contentions persuasive.

At the outset, we acknowledge what appears to be a jurisdictional flaw in this appeal. The district court's order purported to remand Culbertson's claim to the Secretary for further administrative proceedings. Generally, such a remand in social security cases is not considered to be a final appealable order. Guthrie v. Schweiker, 718 F.2d 104 (4th Cir.1983). In this instance, however, we are convinced that the district court's order operates as a final denial of appellant's claim. The court's remand implicitly assumed that appellant could not assert a Shrader claim if her father had the ability to pursue an appeal on her behalf in 1976. Appellant, however, has never remotely asserted, nor is there any evidence of record to suggest, that her father had a mental illness in 1976 that would have prevented him from understanding the Secretary's procedure for administrative appeals. See Shrader, 631 F.2d at 302. We have no doubt, therefore, that the district court's order has placed appellant's claim in the Secretary's hands for purposes of a final denial.

Certain judicial orders may well carry a "death-knell" or "practical finality" quality. See Karriem Wali Muhammad v. Warden, Baltimore City Jail, 849 F.2d 107 (4th Cir.1988), citing McKnight v. Blanchard, 667 F.2d 477 (5th Cir.1982). In such circumstances, it is entirely appropriate for a reviewing court to treat as final an...