Johnson v. Mathews

• Decision Date: 15 June 1976
• Docket Number: 75-1345,Nos. 75-1297,s. 75-1297
• Citation: 539 F.2d 1111
• Parties: Gilbert JOHNSON, Individually and on Behalf of all others similarly situated, Appellee-Appellant, v. F. David MATHEWS, Secretary of the Department of Health, Education & Welfare, Appellant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1111

539 F.2d 1111

Gilbert JOHNSON, Individually and on Behalf of all others similarly situated, Appellee-Appellant, v. F. David MATHEWS, Secretary of the Department of Health Education & Welfare, Appellant-Appellee.

Nos. 75-1297, 75-1345.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 10, 1975.

Decided June 15, 1976.

Harry R. Silver, Appellate Section, Civ. Div., U. S. Dept. of Justice, Washington, D. C., for F. David Mathews of HEW; Rex E. Lee, Asst. Atty. Gen., Jefferson City, Mo., Donald J. Stohr, U. S. Atty. (Barry Short, U. S. Atty. effective May 15, 1976), St. Louis, Mo., William Kanter and John M. Rogers, Attys. Appellate Section, Civ. Div., Dept. of Justice, Washington, D. C., on brief.

Walter Heiser, Legal Aid Society of City of St. Louis, St. Louis, Mo., for Gilbert Johnson.

Before HEANEY, WEBSTER and HENLEY, Circuit Judges.

WEBSTER, Circuit Judge.

This is a class action brought on behalf of individuals in Missouri who began receiving Aid to the Permanently and Totally Disabled (PTD) benefits from the State of Missouri after July 1, 1973, but before December 31, 1973, and were thereafter initially determined to be ineligible for benefits under the federal Supplemental Security Income for Aged, Blind and Disabled (SSI) program, which supplanted the Missouri PTD program in January, 1974. The District Court entered both preliminary and permanent injunctive relief enjoining the Secretary of Health, Education, and Welfare from withholding benefits from the individual plaintiff and the members of the class until they were given notice of and an opportunity for an evidentiary hearing prior to any termination of such benefits. The District Court, however, refused to order the defendant to make retroactive payments of benefits to the individual plaintiff or members of the class. Both plaintiff and defendant appeal. For the reasons stated below, we affirm the judgment of the District Court. ¹

A review of the history of the state PTD and federal SSI programs is necessary for a proper evaluation of the various claims in this case.

In October, 1972, Congress repealed the categorical assistance program of federal grants to state administered disability assistance programs for the aged, blind, and disabled (Title XIV of the Social Security Act). Pub.L.No.92-603, § 303 (Oct. 30, 1972). In its place, Congress established, in Title XVI of the Social Security Act, a new income maintenance program, effective as of January 1, 1974, which replaced the state administered programs with the federal SSI program establishing uniform eligibility criteria. Pub.L.No. 92-603, § 301. Under the SSI program, the federal government was to administer the program and was to assume the burden of providing benefits to those persons who were disabled as defined by the Act.

As originally enacted, the SSI program provided that a person found permanently and totally disabled under an approved state plan in effect in October, 1972, would automatically be considered disabled for purposes of the SSI program if he received state aid during December, 1973, and remained continuously disabled. Pub.L.No.92-603, § 301. On December 31, 1973, one day before the SSI program was to become effective, Congress amended Pub.L.No. 92-603 to require that in addition to receiving benefits during December, 1973, an individual must have received benefits for one month prior to July, 1973, in order to qualify under the "grandfather" clause. Pub.L.No.93-233, § 9 (Dec. 31, 1973); see 42 U.S.C. § 1382c(a)(3)(E). The purpose of this amendment was "to prevent the conversion to the Federal program of persons who in months immediately prior to the January 1974 changeover to SSI may have been improperly placed on the State aid to the disabled rolls." H.R.Rep.No.93-871, 2 U.S.Code Cong. & Admin.News, p. 2808 (1974). See also H.R.Rep.No.93-627, 2 U.S.Code Cong. & Admin.News, pp. 3177, 3183 (1973). Thus, as of January 1, 1974, the federal government had for all practical purposes taken over the payments of benefits to the disabled needy. Those individuals who were receiving Missouri PTD benefits as of December 31, 1973, and who had also received such benefits for at least one month prior to July, 1973, were conclusively presumed to meet the federal standards of disability and began receiving SSI benefits.

The plaintiff and members of the class in this case are individuals who were receiving state PTD benefits in December, 1973, but who had commenced receiving those benefits after July 1, 1973, and were thus not automatically qualified under the federal program. These persons had to meet the federal standard of disability in order to receive benefits under the SSI program.

The last minute amendment to the "grandfather" clause presented the Secretary with the problem of dealing with those individuals who had commenced receiving benefits under a state plan between July and December, 1973, but were facing termination of benefits. Although no statutory provisions existed as of January 1, 1974, to pay benefits to these "rollback" cases as such, the Secretary used a statutory provision, ostensibly aimed at initial applicants who were found to be presumptively disabled, to continue payments to persons who had not yet been initially determined to be qualified. See 42 U.S.C. § 1383(a)(4)(B), which provides that before an initial determination of eligibility the Secretary may pay benefits for a period of up to three months to those whom he judges to be presumptively disabled. By regulation, the Secretary classified rollback cases as presumptively disabled. See 20 C.F.R. § 416.954. Under this system, the rollback recipient would receive presumptive SSI benefits until an initial determination of eligibility. If the initial determination was adverse to the party's claim for SSI benefits, presumptive disability benefits ceased immediately. The unsuccessful claimant then had the right to have this determination reconsidered in a proceeding where notice and hearing rights were provided. However, no benefits were provided after an adverse initial determination. The initial determination was made upon the basis of a paper review of the records maintained under Missouri's disability assistance program and without notice or an opportunity to be heard.

At the urging of the Secretary, Congress passed, in March, 1974, legislation extending the period during which the Secretary might pay presumptive SSI disability benefits to rollback recipients from three months to the period ending on December 31, 1974. Pub.L.No.93-256 (March 28, 1974). Congress also provided "that no such benefits may be paid on the basis of such presumptive disability for any month after the month in which the Secretary of Health, Education, and Welfare has made a determination as to whether such individual is disabled * * *." Id.

Plaintiff represents a class of persons who have received adverse initial determinations but who have not yet had their cases reconsidered, and thus they would not have received SSI benefits beyond the initial determination date except for the District Court's injunctive order. The District Court's injunction was based upon its holding that the individual plaintiff and the members of the class he represents were entitled to notice and a hearing before the benefits they were receiving on the basis of presumptive disability could be terminated.

The District Court first issued a temporary restraining order preventing discontinuance of payments to the plaintiff and the class members until they were given a pre-termination hearing. The District Court initially refused to accept the government's contention that retroactive SSI benefits were barred by the sovereign immunity doctrine, but later did issue a stay of any retroactive relief pending disposition on the merits. The District Court then issued a permanent injunction incorporating its prior orders. Apparently, the District Court held that the payment of retroactive SSI benefits was barred by sovereign immunity since it incorporated the stay into its final order. The government appeals from the District Court's decree granting injunctive relief; ² the plaintiff appeals from the denial of retroactive payment of SSI benefits.

I. JURISDICTION

The government originally contended on appeal that the District Court lacked federal subject matter jurisdiction, relying upon Weinberger v. Salfi,422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). It now concedes that jurisdiction may be found under 42 U.S.C. § 405(g) ³ in light of the recent Supreme Court opinion in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); we agree. ⁴ In Eldridge, the Court explained the application of the test announced in Salfi :

Salfi identified several conditions which must be satisfied in order to obtain judicial review under § 405(g). Of these, the requirement that there be a final decision by the Secretary after a hearing was regarded as "central to the requisite grant of subject matter jurisdiction . . . ." Id., 422 U.S. at 764, 95 S.Ct. at 2466. Implicit in Salfi however, is the principle that this condition consists of two elements, only one of which is purely "jurisdictional" in the sense that it cannot be "waived" by the Secretary in a particular case. The waivable element is the requirement that the administrative remedies prescribed by the Secretary be exhausted. The nonwaivable element is the requirement that a claim for benefits shall have been presented to the Secretary. Absent such a claim there can be no "decision" of any type. And some decision by the Secretary is clearly required by the statute. (footnote omitted)

96 S.Ct. at 899. ⁵

As in Eldridge, the special circumstances of this case warrant our holding that the test of Salfi has been met. First, the plaintiff and the members of the class have effectively presented a claim to continued presumptive disability benefits to the Secretary. When the...