Dixon v. Sullivan

• Decision Date: 08 May 1992
• Docket Number: No. 83 Civ. 7001 (WCC),83 Civ. 8609 (WCC) and 84 Civ. 0110 (WCC).,83 Civ. 8264 (WCC),83 Civ. 7001 (WCC)
• Citation: 792 F. Supp. 942
• Parties: David DIXON, et al., Plaintiffs, and the State of New York, Plaintiff-Intervenor, v. Louis SULLIVAN, as Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Southern District of New York

792 F. Supp. 942

David DIXON, et al., Plaintiffs and the State of New York, Plaintiff-Intervenor, v. Louis SULLIVAN, as Secretary of Health and Human Services, Defendant.

Nos. 83 Civ. 7001 (WCC), 83 Civ. 8264 (WCC), 83 Civ. 8609 (WCC) and 84 Civ. 0110 (WCC).

United States District Court, S.D. New York.

May 8, 1992.

Scott A. Rosenberg, Asst. Director of Litigation, Civil Appeals & Law Reform Unit, The Legal Aid Soc. (Matthew Diller, of counsel), Kathleen A. Masters, Attorney-in-Charge, Robert Belfort, Supervising Atty., Park Place Trial Office (Susan R. Sternberg, of counsel), New York City, Martin Price, Attorney-in-Charge, Brooklyn Office for the Aging, The Legal Aid Soc. (Barbara Quackenbos, of counsel), Brooklyn, N.Y., for plaintiff Class.

Robert Abrams, Atty. Gen. of the State of N.Y., Mary Fisher Bernet, Asst. Atty. Gen., New York City, for plaintiffs-intervenors, Cesar Perales and the State of N.Y.

Otto G. Obermaier, U.S. Atty., S.D.N.Y., Sapna V. Raj, Sp. Asst. U.S. Atty., New York City (Donald Gonya, Chief Counsel for Social Sec., George Lowe, Deputy Associate Gen. Counsel, Dean Landis, Office of the Gen. Counsel, Dept. of Health and Human Services, Social Sec. Div., of counsel), for defendant.

OPINION AND ORDER

WILLIAM C. CONNER, District Judge:

This class action was originally brought before Judge Lasker by applicants for and recipients of benefits based on disability under the federal Supplemental Security Income and Old Age Survivor's and Disability Insurance ("OASDI") programs, administered by the Secretary of Health and Human Services (the "Secretary" or "Defendant") pursuant to the Social Security Act, 42 U.S.C. § 401, et seq., to challenge the Secretary's policy of denying benefits to claimants whose impairments are "not severe" without inquiry into the effect of claimants' ages, educations, and work histories on their ability to work. Defendant contended that the severity regulation is used only to screen out de minimis claims. Plaintiffs replied that the regulation is systematically applied to deny meritorious claims. Plaintiffs also challenged the Secretary's refusal to consider the cumulative effect of different impairments in making severity determinations.

Prior to 1978, the Secretary's regulations provided that a claimant could be denied benefits on medical considerations alone "where the only impairment is a slight neurosis, slight impairment of sight or hearing, or similar abnormality or combination of slight abnormalities." 20 C.F.R. § 404.1502(a) (1968). This "slight impairment" policy was superseded by the "severity regulation," which is step two of a five-step sequential evaluation procedure adopted by the Secretary in 1978, and clarified in 1980. See 20 C.F.R. § 404.1520.¹ In 1982, the Secretary issued Social Security Ruling ("SSR") 82-55 instructing Social Security administrators not to consider the combined effects of impairments which do not individually meet the Secretary's severity standard. SSR 82-55 also listed 20 specific impairments which the Secretary determined are non-severe per se.² This ruling bound administrative law judges and the Appeals Council, and was made effective retroactively to August 20, 1980. After Congress passed the Disability Reform Act of 1984, the Secretary invalidated his practice of refusing to consider impairments in combination. See SSR-III-II. Subsequently, the Secretary published SSR 85-28, which clarifies the policy for determining when a person's impairment may be found not severe. Among other things, SSR 85-28 rescinds the list of 20 specific non-severe examples published in SSR 82-55.

By order dated July 26, 1984, Judge Lasker conditionally certified a statewide class in this action consisting of all disability claimants whose benefits had been, or would in the future be, denied or terminated pursuant to the severity regulations or Social Security Ruling 82-55, after July 20, 1983. The Court also granted a preliminary injunction, prohibiting the Secretary from denying or terminating disability benefits on the basis of the severity regulations. Dixon v. Heckler, 589 F.Supp. 1494, 1512 (S.D.N.Y.1984). In addition, the injunction directed the Secretary to identify and notify class members and to reconsider their claims.

On appeal, the Second Circuit affirmed Judge Lasker's Order granting a preliminary injunction. Dixon v. Heckler, 785 F.2d 1102 (2d Cir.1986). The Supreme Court subsequently granted certiorari, vacated the judgment of the Court of Appeals and remanded the case for further consideration in light of its decision in Bowen v. Yuckert, 482 U.S. 137, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987), upholding the facial validity of the severity regulation and its requirement that disability claimants make a threshold showing of impairment, based on medical criteria alone, before vocational factors would be considered. Thereafter, the Second Circuit ordered that the preliminary injunction issued by Judge Lasker be vacated, and remanded the case for further proceedings in light of Yuckert. See Dixon v. Heckler, 827 F.2d 765 (2d Cir.1987). On November 5, 1987, this Court denied plaintiffs' motion to reinstate the preliminary injunction. Dixon v. Bowen, 673 F.Supp. 123 (S.D.N.Y.1987).

Before this case was transferred to this Court, Judge Lasker ruled, in a letter dated September 17, 1987, that plaintiffs had "made a sufficient threshold showing under Bowen v. City of New York, 476 U.S. 467, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986), to justify their entitlement to discovery as to whether a clandestine policy of the Secretary existed which could support a finding that the statute of limitation should be tolled."

In December 1989, the Secretary moved for summary judgment. Because plaintiffs had not yet completed discovery, the Court deferred consideration of the Secretary's motion in order to allow plaintiffs to take a number of depositions in this action. See Dixon v. Bowen, 126 F.R.D. 483 (S.D.N.Y. 1989). The Court further noted that "if plaintiffs show that the Secretary applied the severity test in a manner stricter than that set forth in his published regulations, which express a policy of using step two to screen out only de minimis cases, plaintiffs will have met the requirements of City of New York." Id. at 488.

After the completion of discovery, the parties agreed to resolve the remaining matters in this action by trial on a stipulated record. Toward this end, the parties have entered into a stipulation as to the documents and deposition testimony that constitutes the trial record in this case. The parties have also agreed to a number of facts stipulated to be true. Plaintiffs now seek judgment on the following claims: (1) That POMS DI § 2102 and SSR 82-55 violate the severity regulation and the Social Security Act because they do not provide for an individualized functional assessment of severity; (2) that these provisions violate the Second Circuit's requirement that allegations of pain must be fully considered; (3) that POMS DI § 2102 and SSR 82-55 were systematically misapplied by adjudicators; (4) that the severity standard was misapplied even before issuance of POMS DI § 2102; (5) that the Secretary's refusal to consider the combined effects of not severe impairments violated the Social Security Act; and (6) that the SSA's issuance of POMS DI § 2102 and SSR 82-55 violated the notice and comment provisions of the Administrative Procedure Act. Plaintiffs further contend that this Court should toll the statute of limitations as to their claims because of various covert practices on the part of the Secretary and that this Court should grant permanent injunctive relief and should order reopening and readjudication of claims denied as not severe between June 1976 and July 19, 1983.

DISCUSSION

A. Bowen v. Yuckert

In Bowen v. Yuckert, 482 U.S. 137, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987), the Supreme Court upheld the severity regulation as valid on its face. The Court, in an opinion joined by six Justices, held that a threshold showing of a severe medically determinable impairment required under the severity regulation is consistent with the language and legislative history of the Social Security Act. Noting the "exceptionally broad authority" of the Secretary to prescribe regulations with respect to proving disability under the Act, the Court held that 20 C.F.R. § 404.1520(c) was consistent with the definition of disability provided in section 223(d)(1)(A) of the Act, 42 U.S.C. § 423(d)(1)(A). Specifically, the Court observed that the Act defined "disability" as an "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment...." Yuckert, 482 U.S. at 146, 107 S.Ct. at 2293 (citing 42 U.S.C. § 423(d)(1)(A)). The Supreme Court noted further that the regulation adopts precisely this type of functional approach to disability. Under the regulation, as under the Act, "if the impairments are not severe enough to limit significantly the claimant's ability to perform most jobs, by definition the impairment does not prevent the claimant from engaging in any substantial gainful activity." Id.

In a footnote, the Court further stated that "the severity regulation plainly adopts a standard for determining the threshold level of severity: the impairment must be one that `significantly limits your physical or mental ability to do basic work activities'" Id. at 153 n. 11, 107 S.Ct. at 2297 n. 11 (citing 20 C.F.R. § 404.1520(c)). Thus, the Court remarked that the Act expressly places on the claimant the burden of showing a medically determinable impairment on the claimant and that the Secretary has no need to consider the claimant's age, education, and work experience if the claimant is unable to meet this threshold burden of establishing medical severity. Id. at 148, 107 S.Ct. at 2294.

Justice O'Connor, in a concurrence joined by Justice Stevens, noted that "respondent's...