Gosnell v. Harris

• Decision Date: 04 September 1981
• Docket Number: No. C-3-77-28.,C-3-77-28.
• Citation: 521 F. Supp. 956
• Parties: Willam F. GOSNELL, Plaintiff, v. Patricia Roberts HARRIS, Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — Southern District of Ohio

521 F. Supp. 956

Willam F. GOSNELL, Plaintiff, v. Patricia Roberts HARRIS, Secretary of Health and Human Services, Defendant.

No. C-3-77-28.

United States District Court, S. D. Ohio, W. D.

September 4, 1981.

Steven B. Horenstein, Dayton, Ohio, for plaintiff.

Joseph E. Kane, Asst. U. S. Atty., Columbus, Ohio, for defendant.

OPINION AND ORDER

CARL B. RUBIN, Chief Judge.

This case is before the Court on Defendant's Motion to Dismiss Plaintiff's Amended Complaint. Plaintiff has filed a memorandum in opposition and a motion for summary judgment with supporting memorandum.

PROCEDURAL HISTORY

Plaintiff filed at least four applications with the Social Security Administration (hereinafter SSA) seeking disability benefits. (Tr. 17) The first application was filed in 1964. The Secretary initially denied the application in August 1964 and Plaintiff did not appeal the denial. Plaintiff refiled an application for benefits in 1968. Again, the Secretary initially denied the application and Plaintiff pursued no appeal. Plaintiff filed a third application for benefits in 1972. This application was also denied initially by the Secretary and it was denied on reconsideration. Plaintiff sought no appeal. In 1974, Plaintiff filed his fourth application for disability benefits. The Secretary denied the application initially and upon reconsideration. However, Plaintiff sought review of the denial of this application through a request for a hearing before an Administrative Law Judge (hereinafter ALJ).

Following a hearing, the ALJ rendered a decision on August 3, 1976 in which he found that Plaintiff had been disabled since December 1964. Furthermore, he found that because the record had new and material evidence, there was good cause for reopening the 1972 application and for awarding disability benefits 12 months before that application was filed. (Tr. 21) However the ALJ was unable to obtain records of the 1964 and 1968 applications, therefore he could not determine that there was error on the face of the evidence upon which the denials in these applications were based, nor fraud in procurement of the denials, nor "other somewhat unusual circumstances" necessary to permit reopening of the applications under 20 CFR § 404.957(c). (Tr. 21) Although it appeared that the SSA was responsible for failing to maintain the records of the 1964 and 1968 applications (Tr. 17), without the records, the ALJ could not make a determination of whether or not to reopen the applications under 20 CFR § 404.957(c). The ALJ would entertain no presumption that the requirements of the reopening regulations had been met even though he found Plaintiff disabled as of 1964. (Tr. 18, 19, 21, 220-222).

Plaintiff requested a review of the ALJ's decision by the SSA's Appeals Council. He claimed that the ALJ should have awarded him benefits retroactively to December 1964 or, alternatively to January 1968 (Tr. 7). After a review of Plaintiff's case and claims, the Appeals Council found that the ALJ's decision was correct, and accordingly, adopted it as the final decision of the Secretary. (Tr. 4).

Plaintiff appealed to this Court. After a review of the case and the applicable regulations concerning reopenings of applications, we found that Plaintiff should have been awarded benefits retroactive to December 1964. We reasoned that the Secretary abused his discretion in refusing to open the 1964 and 1968 applications under 20 CFR § 404.957(c)(8). This was based on the Secretary's position of requiring Plaintiff to prove error on the face of the evidence in the 1964 and 1968 applications even though those applications were unavailable because of the Secretary's apparent negligence. This position, under the facts of this case, impermissibly foreclosed Plaintiff from showing that reopening was proper under 20 CFR § 404.957(b), (c)(8). Furthermore, we found that the evidence in the record showed that Plaintiff was disabled in 1964. The Secretary was therefore ordered to award Plaintiff disability benefits retroactive to 1964. The Secretary appealed this decision to the United States Court of Appeals for the Sixth Circuit.

In its decision, the Court of Appeals held that, under Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), absent a constitutional challenge, the Secretary's refusal to reopen the 1964 and 1968 applications was not a final agency decision reviewable by this Court. Gosnell v. Califano, Jr. Secretary of HEW, 625 F.2d 744, (6th Cir. 1980). The judgment of this Court was therefore reversed and remanded for entry of an order dismissing the complaint. Id.

On July 21, 1980, Plaintiff petitioned the Court of Appeals for a rehearing and requested remand of the case to this Court with instructions that Plaintiff be permitted leave to amend his Complaint to raise a constitutional challenge. On August 21, 1980, the Court of Appeals entered an order denying the petition for rehearing. However, it left to the discretion of this Court the decision of whether or not Plaintiff should be granted leave to amend his complaint so as to challenge the constitutionality of the Secretary's refusal to reopen the 1964 and 1968 applications.

On September 11, 1980, this Court, in accordance with the mandate of the Court of Appeals, ordered dismissal of Plaintiff's Complaint. Plaintiff filed a motion for reconsideration of this Order to which Defendant filed an opposing memorandum. This Court entered an Order on October 8, 1980 setting aside the September 11, 1980 Order, and dismissing the complaint with leave to file an amended complaint. Plaintiff filed an Amended Complaint to which Defendant filed the motion to dismiss presently before this Court.

THE PARTIES' ALLEGATIONS

In his Amended Complaint, Plaintiff alleges that the Secretary's refusal to reopen the 1964 and 1968 applications "... was arbitrary, capricious, manifestly unfair, and constituted a violation of Plaintiff's rights to substantive and procedural due process and equal protection ..." under the Fifth Amendment. Plaintiff's Amended Complaint ¶ 8.

Plaintiff has apparently abandoned his substantive due process and equal protection claims because in his supporting memorandum he devotes the arguments contained therein to only a procedural due process claim.¹ Specifically, Plaintiff argues that the Secretary's handling of the 1964 and 1968 applications denied him the meaningful review of those applications which due process requires. Furthermore, Plaintiff argues that the Secretary's arbitrary and capricious refusal to reopen those applications according to the applicable regulations was also violative of his right to procedural due process.

The Secretary alleges that because Plaintiff has no vested property right in obtaining disability benefits, he is entitled to no procedural protections other than those set forth in the Social Security Act. Plaintiff failed to exercise the procedures which were available to him at the time he filed the 1964 and 1968 applications. Therefore, the Secretary contends, Plaintiff forfeited his procedural protection and has no additional protections available to him on a petition to reopen the applications. Furthermore, the Secretary argues that Plaintiff has the burden of proving that reopening is justified, notwithstanding the loss of the application files and the Secretary's apparent negligence in causing that loss. Moreover, citing Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), the Secretary argues that any unfairness or abuse of discretion resulting from a refusal to reopen applications is not reviewable by this Court.

OPINION

Plaintiff's failure to proceed to the next level of the SSA's review process rendered the adverse determinations in the 1964 and 1968 applications final. 20 CFR § 404.916. This bars future consideration of his disability claims. The only exception to this finality provision is set forth in the regulations providing for reopening of the SSA's determinations to give additional consideration to the claims asserted in the applications. 20 CFR § 404.957.²

Federal courts may not review claims of unfairness or injustice when the Secretary simply refuses to reopen an application under the applicable regulations. Califano v. Sanders, supra; Gosnell v. Califano, 625 F.2d 744 (6th Cir. 1980); Matos v. Secretary of Health, Education and Welfare, 581 F.2d 282 (1st Cir. 1978). Nevertheless, federal courts are not precluded from reviewing refusals to reopen when a claimant raises a colorable constitutional claim. Califano v. Sanders, supra. Accordingly, the issue in this case is whether or not Plaintiff has raised, in his amended complaint, a colorable constitutional claim sufficient to confer subject matter jurisdiction upon this court.

Because Plaintiff's constitutional claims all stem from a Fifth Amendment procedural due process violation, our first determination is whether or not Plaintiff has a vested property interest in Social Security Benefits to which the procedural protections of due process apply. Mathews v. Eldridge, 424 U.S. 319, 332-33, 96 S.Ct. 893, 901-02, 47 L.Ed.2d 18 (1976). For the reasons set forth below, we find that he does.

The Supreme Court has held that "the `right' to Social Security benefits is in one sense `earned', ....,"³ Flemming v. Nestor, 363 U.S. 603, 610, 80 S.Ct. 1367, 1372, 4 L.Ed.2d 1435 (1960); See, Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971). It has implicitly held that procedural due process applies to the administrative and adjudicative proceedings through which an individual actually obtains benefits, Richardson v. Perales, supra, at 401, 91 S.Ct. at 1427, and not only when those benefits, once obtained, are terminated. See, Mathews v. Eldridge, 424 U.S. 319, 332, 96 S.Ct. 893, 901, 47 L.Ed.2d 18 (1976). Furthermore, the Sixth Circuit has implicitly recognized that due process applies when a claimant files an application for...