Grant v. Shalala

Decision Date07 April 1993
Docket NumberNo. 91-5675,91-5675
Parties, 40 Soc.Sec.Rep.Ser. 527, Unempl.Ins.Rep. (CCH) P 17171A Lois M. GRANT, on behalf of herself and all other similarly situated persons v. Donna E. SHALALA, Secretary of Health and Human Services, Appellant.
CourtU.S. Court of Appeals — Third Circuit

Stuart M. Gerson, Asst. Atty. Gen., James J. West, U.S. Atty., William Kanter, Robert M. Loeb (argued), Attys., Appellate Staff, Civ. Div., Dept. of Justice, Washington, DC, for appellant.

Peter Zurflieh, Lawrence E. Norton, II (argued), Central Pennsylvania Legal Services, Harrisburg, PA, Louise O. Knight, Clement and Knight, Lewisburg, PA, for appellees.

Pamela Walz, Thomas D. Sutton, Community Legal Services, Inc., Philadelphia, PA, for amicus curiae, Jane Doe.

Jonathan A. Weiss, Toby Golick, David S. Udell, New York City, for amici curiae, Claudia Kendrick and Legal Services for the Elderly.

Before: HUTCHINSON, ALITO, and HIGGINBOTHAM, Circuit Judges.

OPINION OF THE COURT

ALITO, Circuit Judge:

This is an interlocutory appeal in a class action brought pursuant to Section 205(g) of the Social Security Act, 42 U.S.C. § 405(g). The question presented is whether the district court may hold a trial and make its own findings of fact regarding the alleged general bias of a Department of Health and Human Services (HHS) administrative law judge (ALJ) or whether the court must instead review the Secretary's findings on this question. Based on the express language of Section 205(g), binding circuit precedent, and the effect that such litigation would have on the independence of administrative law judges, we hold that the district court may not make its own findings but may only review the Secretary's findings and, if necessary, remand to the agency for further proceedings.

I.

In September 1985, Lois Grant filed an application for Social Security Insurance disability benefits. She asserted that she could not perform any substantial gainful employment because of an injury to her knee, as well as pain, depression, and other conditions stemming from that injury. The state agency handling the application denied In 1988, Grant filed a complaint in the United States District Court for the Middle District of Pennsylvania pursuant to Section 205(g) of the Social Security Act, 42 U.S.C. § 405(g), 1 against the Secretary of Health and Human Services, asserting that the decision denying her benefits was contrary to the Social Security Act and the Due Process Clause of the Fifth Amendment. Her complaint specifically alleged (App. 44):

                her claim.   Grant then requested a hearing before an HHS Administrative Law Judge, and her case was assigned to ALJ Russell Rowell.   After a hearing, ALJ Rowell concluded that Grant was not entitled to benefits.   He found that the medical evidence did not show that Grant could not perform sedentary work, such as that in which she had previously engaged.   App. 36, 39.   Furthermore, he found that Grant's complaints of pain were not credible.   App. 37.   In reaching this conclusion, he relied on what he termed "a large element of secondary gain" and noted that following her injury Grant's after-tax benefits from workers' compensation exceeded her before-tax income prior to the injury.   App. 37-38.   Grant then sought review of the ALJ's decision before the HHS Appeals Council, but the Appeals Council denied her application for review
                

ALJ Rowell is inclined in every disability case to deny benefits; he uses his discretion to determine credibility to effect this bias against claimants.

Several months later, Grant filed an amended complaint, which added two additional named plaintiffs, Jamie P. Donnelly and Harold Wallace. 2 In addition, the amended complaint was brought on behalf of a class consisting of certain disability claimants whose cases had been or would in the future be assigned to ALJ Rowell. Among other things, the complaint sought a declaratory judgment that ALJ Rowell was biased against disability claimants and The Secretary opposed class certification and moved for a protective order preventing the plaintiffs from conducting further discovery. 4 The district court denied the Secretary's motions. 5 Grant v. Sullivan, 720 F.Supp. 462 (M.D.Pa.1989).

                that this bias had deprived or would deprive the plaintiffs of a fair hearing.   The complaint also sought an injunction requiring that all of the plaintiffs' claims that ALJ Rowell had rejected be reheard before other ALJs, as well as prohibiting the Secretary "from assigning ALJ Rowell in the future to any tasks which involve the discretion to determine Social Security and/or SSI disability claims." 3  App. 62
                

In February 1990, the district court certified a class consisting of "all claimants for Social Security disability benefits or Supplemental Security Income disability benefits, or both, who have received, or will receive, an adverse decision from Administrative Law Judge Russell Rowell on or after January 1, 1985, and all disability claimants whose claims have been or will be assigned to ALJ Rowell for a decision." Grant v. Sullivan, 131 F.R.D. 436, 450 (M.D.Pa.1990). 6

In the meantime, the Chair of the Social Security Administration Appeals Council, Eileen Bradley, had determined that the agency should conduct its own investigation into the allegations that ALJ Rowell was generally biased against disability claimants. Ms. Bradley appointed a three-member panel and instructed it to examine the records in a random sample of the disability cases decided by ALJ Rowell. She stated that the sample was "anticipated to consist of at least 200 cases." App. 105. She also stated that the panel would seek to determine whether the records in these cases "manifest instances of a pattern of bias of any sort on the part of ALJ Rowell, based, inter alia, on the conduct of the hearings, the language of the decisions, credibility determinations, evidentiary inferences and the accuracy of characterization of medical exhibits." Id. In addition, she stated that the plaintiffs and ALJ Rowell would have the opportunity to appear, testify, introduce evidence, and call and examine witnesses. Id.

After the decision to conduct this administrative investigation was announced, the Secretary filed a motion in the district court asking the court to dismiss or, in the alternative, to stay the case in favor of the administrative investigation. The magistrate judge recommended that the stay be granted provided that the Secretary agreed to postpone the administrative proceeding until the plaintiffs could complete their discovery. The district court, however, rejected this recommendation, stating (App. 133) that it had already decided that the plaintiffs were entitled to a trial in district court on their claims of bias and that exhaustion of administrative remedies should not be required. 7

Despite the district court's denial of the motion, the special panel proceeded with the investigation of ALJ Rowell and set out to examine the records in a statistically significant sampling of his cases. The panel did not attempt to analyze other evidence, such as depositions and statements of co-workers, regarding ALJ Rowell's personality or views.

The panel determined that ALJ Rowell had decided 948 disability cases during a five-year period. From these, the panel selected a random sample and was eventually able to examine the files in 212 cases. All pertinent documents in the files were reviewed, and tape recordings of the hearings were studied.

In October 1990, the panel issued its report. The panel reported that it had "detected no patterns of irregularity during the hearing process, and no indication in the hearing tapes or transcripts it reviewed that Judge Rowell entertains any bias against any of the claimants, and certainly not against all of them." App. 168. The report continued (id. at 169):

Indeed, as a general rule, the Panel has concluded that at the hearings Judge Rowell consistently comported himself in a professional, courtly, polite and gentle fashion, displaying neither hostility nor rancor towards any attorney or claimant.... In addition, our review of the "appeals files" (hearing office records) available to us shows that Judge Rowell is scrupulously conscientious in his preparation for, and conduct of, administrative hearings in Social Security claims.

In addition, the report found no statistical evidence that ALJ Rowell was biased against all disability claimants or that he was biased based on race, ethnicity, gender, or age. Id. at 172-73, 181-82.

The report, however, did criticize ALJ Rowell for employing what the panel termed "irregular language" in about 70 cases. Id. at 174. As examples, the report mentioned cases in which ALJ Rowell had described a claimant whose testimony he did not believe as "manipulative" or a "malingerer," as having put on a "performance" or "charade," or as having attempted to obtain "secondary gain" (i.e., obtain more in benefits than the claimant had previously earned by working). Id. at 174-75. While recognizing that ALJ Rowell was required to make credibility determinations, the panel found that his language in these cases exceeded "the bounds of taste and the needs of a legally sufficient, defensible disability determination." App. 178. The panel also found that ALJ Rowell had placed too much emphasis on the concept of "secondary gain."

The acting Chair of the Appeals Council, Andrew J. Young, generally accepted the panel's conclusions, including all of those noted above. In addition, Mr. Young wrote that although he did not "accept the proposition that an abstract psychological inquiry" regarding ALJ Rowell was appropriate, he had decided, for purposes of completeness, to consider deposition testimony from former co-workers of ALJ Rowell that had been obtained in civil discovery. App. 144. He stated:

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