Hobby v. Hodges

• Decision Date: 30 September 1954
• Docket Number: No. 4818.,4818.
• Citation: 215 F.2d 754
• Parties: Oveta Culp HOBBY, Secretary of Department of Health, Education and Welfare, Appellant, v. Joseph HODGES, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

215 F.2d 754 (1954)

Oveta Culp HOBBY, Secretary of Department of Health, Education and Welfare, Appellant, v. Joseph HODGES, Appellee.

No. 4818.

United States Court of Appeals Tenth Circuit.

September 30, 1954.

John J. Cound, Washington, D. C. (Warren E. Burger, Asst. Atty. Gen., A. Pratt Kesler, U. S. Atty., Salt Lake City, Utah, and Paul A. Sweeney, Department of Justice, Washington, D. C., were with him on the brief), for appellant.

Charles P. Olson, Logan, Utah (Bullen & Olson, Logan, Utah, was with him on the brief), for appellee.

Before PHILLIPS, Chief Judge, and MURRAH and PICKETT, Circuit Judges.

PICKETT, Circuit Judge.

Joseph Hodges brought this action for a review of an order entered by the Appeals Council of the Social Security Administration dismissing his request for a hearing on the determination of benefits which he claimed were due him under Subchapter II of the Social Security Act, 42 U.S.C.A. § 401 et seq. In substance the complaint alleges that Hodges filed an application with the Federal Security Agency for benefits under the Act beginning in November, 1945; that in computing the benefits the Agency did not consider him a wage earner from January, 1937 through June, 1942; that on January 5, 1953, he made a request for a hearing; that this request was dismissed; that Section 403.709(b) of Social Security Administration Regulations No. 3 which requires a request for a hearing to be made within six months from the notice of the order is contrary to the Act; and that he was entitled to a redetermination of his benefits giving consideration to the wages he claimed that he earned during the 1937-1942 period. The relief sought was (1) a reversal of the order denying a request for a hearing and a judgment remanding the matter with instructions to grant a hearing; (2) an order declaring Section 403.709(b) of Regulation No. 3 void; (3) an order directing defendant to make a redetermination of the benefits due the plaintiff, taking into consideration the wages earned during the disputed period; and (4) that the redetermination be made retroactive to November, 1945. The plaintiff also sought a judgment for the amounts found to be due him based on retirement benefits so redetermined. The matter was heard on motions for summary judgment supported by affidavits and exhibits filed by each of the parties. The court sustained the plaintiff's motion and entered a judgment reversing the order of the Administrator and remanding the cause for a redetermination of the retirement benefits due Hodges, taking into consideration the wages he earned during the period from January, 1937 through June, 1942. The court entered judgment "in favor of the plaintiff for such amount as may be due him pursuant to said redetermination" and held Section 403.709 (b) of Regulation No. 3 to be void.

At the outset we are confronted with the question of whether the District Court had jurisdiction to grant the relief prayed for. It is contended that the order which the plaintiff sought to have reviewed was not a final decision of the Administrator which followed a hearing and was not subject to review by the court.

The material facts are as follows: Hodges originally applied to the Bureau of Old-Age and Survivors Insurance for primary insurance benefits on May 1, 1940. On June 2, 1940, his benefits were fixed at $35.73 per month, but he was declared to be ineligible for such benefits as he was then earning more than $14.99 per month.¹ Thereafter, Hodges notified the Bureau that the last month during which he earned wages of more than $14.99 was November, 1941. He was awarded benefits for December, 1941, and January, 1942, but it was determined that he had earned more than $14.99 in February, 1942, and that he was not entitled to any benefits for that month. He then demanded a hearing, which was granted and held before a referee acting for the Social Security Board.² At the hearing the question arose as to whether the plaintiff had actually been paid wages as defined in the Social Security Act during the period from January, 1937 to March, 1940. The referee found that the alleged remuneration was not "wages" as defined by the Social Security Act as amended; that the claimed wages were only credits on the books of the company; and that Hodges had never received payment at all and was not entitled to receive primary insurance benefits.³ The Appeals Council affirmed the referee's decision. Hodges was notified of his right to obtain a review of the Board's action by commencing an action within sixty days in the United States District Court of the district where he resided. No such action was taken.

On March 13, 1946, Hodges filed a second application (effective in November, 1945), for primary insurance benefits based on a wage-earning period which included 1937, 1938 and 1939. On December 19, 1946, the Board refused to consider the amounts claimed as wages during these years and determined that he was entitled to benefits of $23.23 per month, based on wages received by him from July, 1942, through September, 1945. Nothing further was done until January 5, 1953, when Hodges filed a request dated October 31, 1952, for a hearing and alleged that the determination of his benefits on December 19, 1946, was erroneous because it failed to take into consideration the wages he claimed that he earned during the period from January, 1937, through March, 1940. These were the same amounts which were considered and disallowed by the decision of the Board in 1942, and from which Hodges took no further action.

The Act provides that the Administrator (now Secretary)⁴ shall make findings of fact and decisions as to rights of any individual applying for benefits. Whenever any such individual makes a showing that his or her rights may be prejudiced by a decision, then a hearing shall be had with respect to such decision and the Administrator may affirm, modify or reverse the decision based upon the evidence adduced at the hearing. The Administrator on his own motion may hold such hearings, conduct investigations and other proceedings as he may deem necessary or proper for the administration of the Act. 42 U.S.C.A. § 405 (b). When a decision becomes final after a hearing, any individual who was a party to the hearing, may obtain a review of the decision by commencing a civil action in the proper United States District Court within sixty days after the mailing to him of the notice of the decision. The court has power to enter, upon the pleadings and the transcript of the record, a judgment affirming, modifying, or reversing the decision of the Administrator with or without remanding the cause for a rehearing. The findings of the Administrator are conclusive upon the court as to any fact if supported by substantial evidence. 42 U.S.C.A. § 405(g).⁵ The Act thus places the initial burden upon the Administrator to make a decision as to claims by individuals from the application alone. If the individual is dissatisfied with the decision, a hearing may be demanded at which evidence is taken for the purpose of determining the correctness of the decision. It is only after the hearing that the individual may obtain a court review. The review is not a trial de novo but is limited to the pleadings and the transcript of the proceedings at the hearing. The district court has jurisdiction only to review the record. The statute does not give the district court power to treat the complaint as a mandamus action against the Administrator or to hold a hearing and determine the merits of the claim. The determination of claims is solely a function of the Administrator.

The United States may be sued only in cases which are clearly within an authorizing statute, and the courts may not extend the waiver of immunity beyond the letter of the authority given by the statute. United States v. Christensen, 10 Cir., 207 F.2d 757, 758, and the cases there cited. It is within the power of Congress to provide the conditions under which an administrative proceeding may be reviewed in the courts and to determine their jurisdiction. Federal Power Commission v. Pacific Power & Light Co., 307 U.S. 156, 59 S.Ct. 766, 83 L.Ed. 1180; American Power & Light Co. v. Securities and Exchange Commission, 325 U.S. 385, 65 S. Ct. 1254, 89 L.Ed. 1683; N. L. R. B. v. Cheney California Lumber Co., 327 U.S. 385, 66 S.Ct. 553, 90 L.Ed. 739. The order which this action sought to review did not follow a hearing as contemplated by the statute and there was no record before the court to review except the order refusing a hearing.

It is urged that if a prior hearing is jurisdictional to a court action, the Administrator may defeat the statutory right of review by denying the request for a hearing. The immunity rule in many instances may appear to be harsh, but it is well established that without specific statutory authority, an individual has no right of action against the United States in the courts even though the statute creates rights in the individual against the United States. Congress may create rights without providing a remedy in the courts. Stark v. Wickard, 321 U.S. 288, 306, 64 S.Ct. 559, 88 L.Ed. 733; Lynch v. United States, 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434; United States v. Babcock, 250 U.S. 328, 39 S.Ct. 464, 63 L.Ed. 1011. It is for Congress alone to say how the rights which it creates shall be enforced, and when one remedy is specified, it normally excludes another. Switchmen's Union of North America v. National Mediation Board, 320 U.S. 297, 64 S.Ct. 95, 88 L. Ed. 61. It may withhold all remedy or it may provide an administrative remedy only and make it exclusive.⁶ Dismuke v. United States, 297 U.S. 167, 172, 56 S.Ct. 400, 80 L.Ed. 561. In the Christensen Case, supra 207 F.2d 758, the statute authorized actions on National Service Life Insurance Policies in cases where there had been a disagreement as to a claim. We held that in such cases, "* * * a disagreement is...