Fisher v. Secretary of U.S. Dept. of Health, Ed., and Welfare, 74-1740

• Decision Date: 24 September 1975
• Docket Number: No. 74-1740,74-1740
• Citation: 522 F.2d 493
• Parties: Eula Mae FISHER, for herself and all others similarly situated, Plaintiff-Appellant, v. The SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 493

522 F.2d 493

Eula Mae FISHER, for herself and all others similarly situated, Plaintiff-Appellant, v. The SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH EDUCATION, AND WELFARE et al., Defendants-Appellees.

No. 74-1740.

United States Court of Appeals, Seventh Circuit.

Argued April 7, 1975.

Decided Sept. 3, 1975.

Rehearing Denied Sept. 24, 1975.

Rose E. Firestein, John T. Manning, Indianapolis, Ind., for plaintiff-appellant.

John E. Hirschman, U. S. Atty., Indianapolis, Ind., Carla A. Hills, Asst. Atty. Gen., Eloise E. Davies, Atty., Appellate Section, Civil Div., Dept. of Justice, Washington, D. C., for defendants-appellees.

Before PELL and SPRECHER, Circuit Judges, and PERRY, Senior District Judge. ^*

PELL, Circuit Judge.

This is an appeal from a judgment of the district court affirming the decision of the Secretary of the United States Department of Health, Education and Welfare denying compensation insofar as plaintiff's complaint sought review of that decision and dismissing the remainder of the complaint. Plaintiff ¹ is a black woman who worked for various persons as a domestic servant until July 1966. She worked as a dishwasher at a hotel from July of 1966 until October 1968 at which time she was injured while working. Her complaint alleges that this injury resulted in her becoming disabled within the meaning of various subsections of the Social Security Act. 42 U.S.C. § 423; 20 C.F.R. § 404.1501 ff. She filed a claim under 42 U.S.C. § 401 ff. Her claim was denied by the hearing examiner of the Social Security Administration (now Administrative Law Judge; hereinafter ALJ) on the grounds that she failed to establish eligibility for disability compensation by showing the requisite earnings during the preceding 40 quarters, principally because of a lack of showing of compensation of at least $50.00 per quarter for sufficient quarters from a single employer for the period during which she worked as a domestic employee. 42 U.S.C. §§ 423(c)(1)(B)(i), 409(g)(2). See also 26 U.S.C. § 3121(a)(7)(B). The Appeals Council affirmed this decision, and plaintiff filed this action for review under 42 U.S.C. § 405(g) in addition to seeking other relief.

Count I of plaintiff's complaint alleges that the conclusions of the ALJ were not supported by substantial evidence. On appeal she argues that the ALJ applied too strict a standard in determining that plaintiff had not met her burden. In Count II of the complaint, plaintiff alleges that the Secretary of the Treasury and his delegate (the Commissioner of Internal Revenue) have failed "to compel, to attempt to compel, or to take prudent measures to compel" the collection of the employment tax. Plaintiff seeks mandamus relief to compel the collection of the employment tax on domestic workers' salaries if the $50.00 per employer per quarter limitation is declared unconstitutional or mandamus to compel the Commissioner to require reporting of all domestic workers' wages paid if the limitations are upheld. See 26 U.S.C. § 3121(a)(7) (B). Count III of the complaint seeks a permanent injunction against the Secretary of the Treasury, the Secretary of the Department of Health, Education and Welfare, and the Commissioner of Internal Revenue enjoining them from enforcing the one employer earnings requirement against black citizens. She alleges that these provisions are void because:

"they segregate a certain class of all employees by race and status to be denied disability insurance under the Social Security Act and therefore deny them civil and human rights inhering in the due process clause of U.S.Const. Amends. V, XIII and XIV, and freedom from slavery and servitude guaranteed by U.S.Const. Amend. XIII. These irrational, arbitrary conditions . . . perpetuate bondage and peonage, forbidden by terms of U.S.Const. Amend. XIII and the Anti-Peonage Act, 42 U.S.C.A. 1994 (1969)."

Counts II and III are brought as a class action. The complaint was later amended to ask for a declaration that the minimum earnings requirement during a certain number of quarters as such was unconstitutional and for an injunction against its enforcement. The complaint was also amended to plead that domestic workers are an identifiable black racial group, an identifiable sexual group of women, and an identifiable economic group of poor wage-earners. On appeal, plaintiff argues that the district court erred in dismissing each count and also erred in not convening a three-judge court. The plaintiff urges us to decide the constitutional questions rather than remanding for a three-judge court to be constituted. According to plaintiff, all the facts needed for us to decide this portion of the case are matters of public record.

I. Sufficiency of Evidence

We must uphold the decision of the Secretary if it is supported by substantial evidence. 42 U.S.C. § 405(g). In his opinion the ALJ stated:

"following the expiration of the statute of limitations with respect to any year the absence of any entry of the Secretary's records as to the wages alleged to have been paid by an employer to an individual during any period in such year shall be presumptive evidence that no such alleged wages were paid to such individual in such period."

This quotation is an accurate paraphrase (almost a quotation) of 42 U.S.C. § 405(c)(4)(B) and 20 C.F.R. § 404.804, under which the ALJ was required to evaluate the evidence.

As a part of his evaluation of the evidence, the ALJ stated:

"Since in the instant case there is no showing of wages on the individual's earnings record for the periods in question, the evidence required to prove the alleged wages must be Substantial and Of probative value and must clearly establish both the amount of wages paid and the time of payment. Moreover, the evidence necessary to establish these wages for a period in a year or years when the statutory limitation has expired must also be sufficient To overcome the statutory presumption that no such wages were paid.

"The record before the hearing examiner is Void of factual or conclusive evidence to substantiate the claimant's allegations of wages paid during the period involved. Since the claimant has been unable to meet the burden of proof and has failed to furnish adequate evidence of alleged wages paid to establish additional quarters of coverage, the hearing examiner is constrained to conclude that the claimant lacks the necessary quarters of coverage to be fully insured and that she is not entitled to disability insurance benefits." (Italics added.)

Plaintiff argues that the italicized phrases show that the ALJ required her to meet too heavy a burden of proof and that he ignored her testimony. She principally relies on Breeden v. Weinberger, 493 F.2d 1002 (4th Cir. 1974), and Kephart v. Richardson, 505 F.2d 1085 (3d Cir. 1974).

The consideration of these cases takes us on the customarily difficult journey on the shimmering semantical sands involved when an effort is made to put into words the concept of the dispositive effect of a presumption when the determiner of ultimate fact also has before him other evidence.

In Breeden the court reversed a decision in which the ALJ and the district court had required the claimant to prove her case by "clear and convincing evidence." The Fourth Circuit held that the presumption did not alter the burden of proof requirement that a claimant need only prove his administrative claim by a preponderance of the evidence. The court further held, however, that the statutory presumption here involved did not vanish when contradictory evidence was introduced under the Thayer "bursting bubble" theory of presumptions, but rather that the presumption would survive the offering of contradictory evidence and could thereafter constitute substantial evidence that no wages were paid. 493 F.2d at 1007.

Upon the basis of the evidence in the case before it, which evidence need not be repeated here, the Fourth Circuit concluded that the administrative decision was not supported by substantial evidence. A reading of the opinion makes it obvious that a substantial motivating factor in the court's decision was the arbitrary rejection of evidence by both the ALJ and the Appeals Council. It, of course, can scarcely be contended that the statutory presumption should be the basis for rejecting consideration of evidence simply because it is contrary to that created by the presumption.

In Kephart the Third Circuit reversed and remanded for further proceedings the denial of a claim on the grounds that the ALJ had applied too strict a standard in requiring "substantial evidence . . . sufficient to rebut the presumption of validity accorded by law to the Secretary's wage records." 505 F.2d at 1088. The court recognized that the Wigmore (Thayer) theory of presumptions did not apply to this statutory presumption but held that it is merely one evidentiary factor to be weighed along with other evidence. The court also stated, 505 F.2d at 1089, that it saw nothing in the statute which required the claimant to rebut the negative condition of the records by "substantial evidence," citing on a "Cf." basis Thacker v. Gardner, 268 F.Supp. 663 (W.D.Va.), aff'd, 387 F.2d 387 (4th Cir. 1967), Cert. denied, 390 U.S. 1017, 88 S.Ct. 1272, 20 L.Ed.2d 168. We note that although the court denied the need for corroboration of the claimant's testimony if the ALJ found his testimony credible, in Kephart the claimant's testimony was in fact corroborated by his wife and three other persons. Corroboration of testimony can, of course, be a strong factor in minimizing doubts an ALJ might have regarding a claimant's testimony.

The defendants in the present case in support of the determination below rely in part upon Thacker, supra. However, in Breeden the court stated that it "did not necessarily approve the district court's apparent insistence on 'positive evidence.' " The court went on to state that its per curiam opinion affirming in Thacker...