Levine v. Folsom

• Decision Date: 30 June 1959
• Docket Number: No. 16156.,16156.
• Parties: Hannah LEVINE, Appellant, v. Marion B. FOLSOM, Secretary of Health, Education and Welfare, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

268 F.2d 531 (1959)

Hannah LEVINE, Appellant, v. Marion B. FOLSOM, Secretary of Health, Education and Welfare, Appellee.

No. 16156.

United States Court of Appeals Eighth Circuit.

June 30, 1959.

Irving Achtenberg, Kansas City, Mo., for appellant.

Morton Hollander and William A. Montgomery, Attorneys, Department of Justice, Washington, D. C., for appellee.

Before GARDNER, Chief Judge, and WOODROUGH and JOHNSEN, Circuit Judges.

WOODROUGH, Circuit Judge.

This case comes on for hearing on a motion filed on April 3, 1959, by the appellee Marion B. Folsom through his attorneys to vacate a judgment that was rendered in the court below and to remand the case with instructions to the District Court to dismiss the complaint on the ground that appellee, who was Secretary of Health, Education and Welfare when the action was commenced, is no longer a proper party to it in that he has been succeeded in the office by Arthur S. Flemming and that the action has abated.

Appellant brought the action as plaintiff in the District Court under Section 205(g) of the Social Security Act as amended, 42 U.S.C.A. § 405(g), for review of a decision by a referee under the Secretary of Health, Education and Welfare, which denied appellant's application for payment of old age insurance benefits. She claimed the right to recover under the Act by reason of income to her and taxes paid thereon received for services as co-executrix of an estate and as rents from real estate which she owned. The referee found upon hearing that none of this income constituted "net income from self-employment" within the meaning of 42 U.S.C.A. § 411(a) and that, therefore, appellant did not have the requisite wage record to entitle her to recover the insurance benefits. That is to say, she had not proved a right to compel the Secretary to certify to the Managing Trustee under 42 U.S.C.A. § 405(i) that she was entitled to receive any payment on account of her claim for insurance benefits.

On July 29, 1958, the District Court, after hearing, entered an order on appellee's motion for summary judgment affirming the referee's findings and conclusions. Appellant, on August 8, 1958, moved to vacate and set aside the order or in the alternative for a new trial. At that time no other person than Marion B. Folsom was named party defendant in the action. The Department of Health, Education and Welfare and the United States of America had been named as defendants in the original complaint but had been dismissed for want of jurisdiction on the government's motion on January 13, 1958. The plaintiff's counsel acquiesced in the dismissal of those defendants and no appeal was taken from that order of the court. On September 30, 1958, the court denied the motion to vacate or for new trial.

On August 1, 1958, Marion B. Folsom was succeeded in the office of Secretary of Health, Education and Welfare by Arthur S. Flemming, who continues in that office at present.¹ On October 24, appellant filed notice of appeal in which this appellee only was named as party to the judgment sought to be reviewed.²

The appellee contends in support of his present motion that he ceased to be a proper party to the suit upon his retirement from office and the succession of Mr. Flemming on August 1, 1958. He contends that no further affirmative proceedings could properly be carried on in the action against him after that date and that there was an abatement of the action against him. The motion for new trial or alternative relief which plaintiff filed on August 8, 1958, a week after the change in the office of Secretary, ought not to have been taken up until a substitution of party defendant had been made. The pendency of the motion for new trial stayed the running of time for taking appeal and preserved jurisdiction of the case in the District Court. Vol. 4 Fed. Digest, Appeal & Error. The preserved jurisdiction should have been exercised by proceedings for substituting defendant before going forward in the case. But under Rule 25(d) F.R.Civ.P.³, 28 U.S.C.A. Such substitution must be based upon a showing made to the District Court upon notice to the officer affected within six months after such successor takes office and in this case the plaintiff did not know of the change of officers and no steps were taken within that period to obtain substitution.

We think that in view of the late decisions of the Supreme Court in Snyder v. Buck, 340 U.S. 15, 71 S.Ct. 93, 95 L.Ed. 15; Klaw v. Schaffer, 357 U.S. 346, 78 S.Ct. 1369, 2 L.Ed.2d 1368, and Glanzman v. Schaffer, 357 U.S. 347, 78 S.Ct. 1370, 2 L.Ed.2d 1368, and the decision of the Third Circuit in Poindexter v. Folsom, 242 F.2d 516, with which we are in accord, and other cases cited, we must hold that Mrs. Levine's action against Marion B. Folsom, Secretary of Health, Education and Welfare, was abated in the District Court upon the succession of Mr. Flemming to that office on August 1, 1958, and failure to substitute party defendant within six months, and that the motion which the appellee, Mr. Folsom, has submitted to us must be sustained.

In the first place, it is clear that the action here is "an action aimed at compelling an official to discharge his official duties" as to which the Social Security Act contemplates that the Secretary shall accord a hearing to an applicant for old age insurance benefits and shall cause findings and decision to be made, and if he finds the applicant to be entitled to payment the Secretary is required to issue certificate to effect payment. It is the kind of an action that abated when Folsom retired from office and could only be continued in the District Court against his successor pursuant to 25(d), F.R.Civ.P.

This is made clear by the decision of the Third Circuit in Poindexter v. Folsom, supra. The action there was against Oveta Culp Hobby, then Secretary of the Department of Health, Education and Welfare, to obtain old age insurance benefits, and Mrs. Hobby was succeeded in office by Marion B. Folsom during its pendency in the District Court. There was no proceeding for substitution of the successor within the six month period after the change of officers fixed by 25(d), but the District Court sustained a motion for summary judgment for defendant affirming the decision of the Referee of the Secretary, approved a stipulation of the parties for substitution of the successor in office as defendant and entered judgment accordingly. On plaintiff's appeal to the Court of Appeals, that Court reversed the judgment, vacated the substitution of Folsom as defendant and remanded the cause with direction to dismiss it as abated. The Court said:

"There have been situations where the provisions of Rule 25(d) were held inapplicable. Where a person seeks a declaration of nationality the rule has not been applied because the judgment sought was a determination of status binding on all the world, not merely on a particular public officer and was not a direction to the head of a governmental department to do something or to refrain from doing something. The rule also has been held to be not binding where the United States has instituted a suit because of the violation of price or rent controls on the theory that in such suits the plaintiff public officer has instituted the action pursuant to a statute on behalf of the United States which is the real party-in-interest. An early determination, that a statute authorizing suits by or against the Public Housing Administrator permitted actions by or against the Federal Housing Administration, resulted in the conclusion that the real party-in-interest was the Federal Housing Administration and so the requirements of Rule 25(d) did not have to be met. Of course actions against a collector of Internal Revenue for the recovery of taxes received by him are against the collector as an individual and not as a public official. Rule 25(d) therefore does not apply.

"The case before us fits itself into none of the situations set out above. While it may be argued that the plaintiffs seek here a declaration that Doris Poindexter has the legal status of Jerome Poindexter\'s widow and that this would be analogous to a declaration of nationality, cf. Lehmann v. Acheson, supra 3 Cir., 214 F.2d 403, a declaration by this tribunal or by the court below or by the referee in respect to Doris\' status as Jerome\'s widow would not be such a determination as would stand against the world as would an adjudication of nationality. What the plaintiffs really seek here is a judgment which would direct the Secretary of the Department of Health, Education and Welfare to pay the plaintiffs benefits claimed under the Old Age and Survivors\' Insurance Benefits Act, 42 U.S.C.A. § 401 et seq. This case is similar on its facts to Chavers v. Hobby, D.C. D.N.J.1956, 19 F.R.D. 393. In the Chavers case the court held the action had abated and therefore the court lacked power to proceed with the action. See also Snyder v. Buck, 1950, 340 U.S. 15, 71 S.Ct. 93, 95 L.Ed. 15; and compare United States ex rel. Trinler v. Carusi, 3 Cir., 1948, 168 F.2d 1014." 242 F.2d 518.

The decision of this court in Fleming v. Goodwin, 165 F.2d 334, 337, is not in conflict. In that case the Price Administrator sued to enforce provisions of the Emergency Price Control Act of 1942 as amended and there were changes during pendency of the suit of incumbents in the office and of persons charged with performing functions that pertained to it. It was held in the court below that the action had abated through noncompliance with Rule 25(d), F.R.C.P., but this court reversed. It declared:

"The purpose of the Rule, like that of the statute which it superseded, was to provide for the continuance of an action, personal in character, brought by or against a public officer, where a substantial need for continuing the action existed and the action could not, without statutory authority, be maintained against his successor after the officer had ceased to

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