Kildare v. Saenz

• Decision Date: 24 March 2003
• Docket Number: No. 01-17464.,01-17464.
• Citation: 325 F.3d 1078
• Parties: Linda KILDARE; Jonean Daniel; Tyrone Bozman; Edgar Copeland; Donald Furr; Christopher Boyko; Harvey Winfield, Plaintiffs-Appellants, v. Rita SAENZ; Donna Mandelstam; Jo Anne B. Barnhart, Commissioner; Linda McMahon; Pete Spencer; Diane Trewin, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1078

325 F.3d 1078

Linda KILDARE; Jonean Daniel; Tyrone Bozman; Edgar Copeland; Donald Furr; Christopher Boyko; Harvey Winfield, Plaintiffs-Appellants, v. Rita SAENZ; Donna Mandelstam; Jo Anne B. Barnhart, Commissioner; Linda McMahon; Pete Spencer; Diane Trewin, Defendants-Appellees.

No. 01-17464.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 11, 2003.

Filed March 24, 2003.

Robert E. Borton, Heller, Ehrman, White, & McAuliffe, LLP, San Francisco, CA, for the plaintiffs-appellants.

Christine N. Kohl, U.S. Department of Justice, Civil Division, Washington, DC, for the defendants-appellees.

Douglas M. Press, Deputy Attorney General, San Francisco, CA, for the defendants-appellees.

Donald B. Verrilli, Jr. and Olivier A. Sylvain, Jenner & Block, LLC, Washington, DC, for amicus curiae National Law Center on Homelessness and Poverty.

Appeal from the United States District Court for the Northern District of California Saundra B. Armstrong, District Judge, Presiding. D.C. No. CV-00-04732-SBA.

Before TROTT, RYMER, and TALLMAN, Circuit Judges.

OPINION

TROTT, Circuit Judge.

Linda Kildare ("Kildare"), Jonean Daniel ("Daniel"), Tyrone Bozman ("Bozman"), Edgar Copeland ("Copeland"), Donald Furr ("Furr"), Christopher Boyko ("Boyko") and Harvey Winfield ("Winfield"), (collectively "Appellants"), appeal the district court's dismissal of their class action suit alleging that California state officials systematically disregard federal regulations when they initially evaluate applications for Social Security Disability Insurance ("SSDI") and Supplemental Security Income ("SSI"), and that the Social Security Administration ("SSA") fails to exercise adequate oversight over the state officials. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

BACKGROUND

Appellants filed this action in the district court on behalf of themselves and others similarly situated against two sets of defendants acting in their official capacities: (1) the United States Commissioner ("Commissioner"), Regional Commissioner, Assistant Regional Commissioner of the SSA, and the Manager for the Center for Disability of the SSA, (collectively "Federal Defendants"); and (2) the Director of the California Department of Social Services and the Deputy Director of its Disability Adult Programs Division ("DAPD"), (collectively "State Defendants").

A. Statutory and Regulatory Framework

The federal government provides disability benefits under two programs administered by the SSA. Bowen v. City of New York, 476 U.S. 467, 469-70, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986). Title II (SSDI) of the Social Security Act ("Act"), 42 U.S.C. §§ 401 et seq., provides benefits to persons with mental or physical disabilities, and Title XVI (SSI) of the Act, 42 U.S.C. §§ 1381 et seq., provides benefits to indigent persons with disabilities. State agencies, acting under the authority of the Commissioner, make the initial determination of whether an individual is disabled for purposes of receiving SSDI/SSI benefits. City of New York, 476 U.S. at 470, 106 S.Ct. 2022.

Federal regulations ("regulations") prescribe a five-step "sequential evaluation" for making the SSDI/SSI disability determination. 20 C.F.R. §§ 404.1520, 416.920; City of New York, 476 U.S. at 470, 106 S.Ct. 2022 (citations omitted). The regulations have detailed rules and standards for state agencies to use in obtaining medical evidence for the initial disability determination. 20 C.F.R. pts. 404, 416. For example, the regulations require state agencies to develop each claimant's complete medical history and make "every reasonable effort" to obtain medical evidence from the claimant's own medical sources. 20 C.F.R. §§ 404.1512(d), 416.912(d). The regulations also contain detailed guidelines on the use of Consultative Examinations ("CEs"), which are physical or mental examinations requested and purchased by state agencies after determining that additional medical evidence is necessary. 20 C.F.R. §§ 404.1519, 404.1519a, 404.1519b, 416.919, 416.919a, 416.919b.

Claimants may employ a three-step administrative review process if the state agency determines they are not disabled. 20 C.F.R. pt. 404, supt. J; pt. 416, supt. N. Upon completion of the administrative review process, claimants may seek judicial review in federal district court pursuant to 42 U.S.C. § 405(g).¹

B. Appellants' General and Specific Allegations

Appellants, a group of individuals with disabilities who were initially denied SSDI and SSI benefits, allege that the State Defendants systematically disregard regulations governing the evaluation of medical evidence for approval of SSDI/ SSI claims. Generally, Appellants claim that the State Defendants systematically fail to develop claimants' medical records as required by the regulations, give insufficient weight to claimants' own medical records, improperly make disability determinations on the basis of CEs that frequently fail to meet federal standards, and issue denial of benefits letters without sufficient explanation for denial. Appellants also claim that the Federal Defendants fail to adequately oversee the State Defendants.

Appellants' specific allegations, however, reveal claims that the State Defendants committed a host of individual errors in making initial disability determinations that vary with each Appellant, rather than a policy of systematically disregarding the regulations. The specific allegations can be divided into nine categories: (1) that DAPD did not adequately or completely develop the claimant's medical history (Kildare, Daniel, Boyko), (2) that DAPD's denial of benefits letters did not give a sufficient explanation for their denial (Kildare); (3) that DAPD did not give proper weight to certain medical reports (Daniel, Bozman); (4) that DAPD did not properly consider the relationship between a claimant's various disabilities (Daniel); (5) that DAPD requested CEs in contravention of the regulations, such as requesting CEs on the same or following day as the application (Kildare, Copeland, Furr, Winfield); (6) that the CEs failed to include an explanation or discuss the evidence for their conclusion (Bozman, Furr); (7) that DAPD performed an inadequate analysis and/or did not draw its conclusions from the facts (Bozman, Copeland); (8) that DAPD failed to explain inconsistencies between two medical reports that were admittedly in conflict (Furr, Boyko); and (9) that DAPD drew a conclusion that conflicted with certain reports and opinions without further explanation (Copeland, Winfield). Appellants also allege specific injuries to each Appellant as a result of the denial of their benefits, such as subsistence on General Assistance and food stamps, lack of medical insurance, and homelessness.

Appellants sought (1) declaratory relief that the State and Federal Defendants' "policies, practices, and procedures" in evaluating SSDI/SSI applications violate state and federal law and the regulations, and (2) injunctive relief requiring the State and Federal Defendants to apply policies and procedures in accordance with applicable law. We note with interest that six of the seven Appellants have succeeded since the filing of this lawsuit in obtaining benefits through the process of administrative review.

DISCUSSION

A. Federal Defendants

Appellants appeal the district court's order finding that it did not have jurisdiction over Appellants' claims against the Federal Defendants based on § 405(g) and 28 U.S.C. § 1361 (mandamus).²

1. Standard of Review

We review de novo a dismissal for lack of subject matter jurisdiction, including a dismissal for failure to exhaust administrative remedies and denial of mandamus. Sommatino v. United States, 255 F.3d 704, 707 (9th Cir.2001); Hoeft v. Tucson Unified Sch. Dist., 967 F.2d 1298, 1302-03 (9th Cir.1992) (exhaustion of administrative remedies); R.T. Vanderbilt Co. v. Babbitt, 113 F.3d 1061, 1065 (9th Cir.1997) (mandamus).

2. Exhaustion of Administrative Remedies

Section 405(g) provides that an individual who has been denied SSDI/SSI benefits may seek judicial review of "any final decision" of the Commissioner. A final decision has two elements: (1) presentment of the claim to the Commissioner, and (2) complete exhaustion of administrative remedies. Johnson v. Shalala, 2 F.3d 918, 921 (9th Cir.1993). The parties do not dispute that Appellants met the presentment requirement, but did not exhaust their administrative remedies. Appellants assert that the district court should have waived exhaustion.

Following City of New York, 476 U.S. 467, 106 S.Ct. 2022, 90 L.Ed.2d 462, we adopted a three-part test for determining whether a particular case merits judicial waiver of § 405(g)'s exhaustion requirement. Johnson, 2 F.3d at 921. "The claim must be (1) collateral to a substantive claim of entitlement (collaterality), (2) colorable in its showing that denial of relief will cause irreparable harm (irreparability), and (3) one whose resolution would not serve the purposes of exhaustion (futility)." Id. (citing Briggs, 886 F.2d at 1139). We conclude that waiver of § 405(g)'s exhaustion requirement is not appropriate in this case because Appellants' claims are not collateral to their claims for benefits, and because the purposes of exhaustion would not be served by waiver. See also Heckler v. Ringer, 466 U.S. 602, 614, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984) (where the claims for benefits are "inextricably intertwined" with the Secretary's procedures, administrative exhaustion pursuant to § 405(g) must be respected).

Collaterality

In City of New York, the plaintiffs challenged a secret policy of the SSA mandating a presumption that certain mentally disabled applicants were qualified to do unskilled work, which effectively eliminated the last two steps in the five-step disability evaluation. 476 U.S. at 473-74, 106 S.Ct. 2022. The Supreme Court held that "[t]he claims ... are collateral to the claims for...