Lindley for Lindley v. Sullivan

• Decision Date: 22 November 1989
• Docket Number: No. 87-1791,87-1791
• Citation: 889 F.2d 124
• Parties: , 27 Soc.Sec.Rep.Ser. 543, Unempl.Ins.Rep. CCH 15031A Ray LINDLEY FOR David A. LINDLEY, Plaintiff-Appellant, v. Louis W. SULLIVAN, M.D., Secretary of Health and Human Services, * Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 124

889 F.2d 124

58 USLW 2325, 27 Soc.Sec.Rep.Ser. 543,

Unempl.Ins.Rep. CCH 15031A

Ray LINDLEY FOR David A. LINDLEY, Plaintiff-Appellant, v. Louis W. SULLIVAN, M.D., Secretary of Health and Human Services, ^* Defendant-Appellee No. 87-1791.

United States Court of Appeals Seventh Circuit.

Argued June 14, 1988.

Decided Nov. 13, 1989.

As Amended Nov. 22, 1989.

Douglas N. Dorris, Harris, Lambert & Wilson, Marion, Ill., for plaintiff-appellant.

Donna L. Calvert, Donald T. McDougall, Michale T. Lamb, Jeffrey M. Taske, Dept. of Health and Human Services, Chicago, Ill., for defendant-appellee.

Before CUDAHY, FLAUM and MANION, Circuit Judges.

CUDAHY, Circuit Judge.

Under the provisions of the Social Security Act (the "Act"), a wage earner who is entitled to receive old age or disability insurance benefits is also generally eligible to receive Child Insurance Benefits ("CIB") for his or her dependent children. Congress expressly chose, however, to limit CIB eligibility when a benefits recipient adopts an unrelated child after the onset date of the recipient's entitlement. Section 202(d)(8) of the Social Security Act, 42 U.S.C. Sec. 402(d)(8). On the other hand, a comparable limitation is not placed upon CIB eligibility when a benefits recipient, or the wife of a recipient, gives birth to a child after the onset date of the wage earner's entitlement. Ray and Mary Lindley learned of these classifications in the Act when their two applications for CIB for David, their adopted son, were denied by the Social Security Administration (the "Administration") because David was adopted after the onset date of Ray's disability. The Lindleys responded by challenging the constitutionality of section 202(d)(8) under the equal protection component of the due process clause of the Fifth Amendment. They now appeal the magistrate's order upholding the constitutionality of section 202(d)(8) and affirming the denial by the Secretary of Health and Human Services (the "Secretary") of their application for CIB. We affirm.

I. Factual Background

Ray and Mary Lindley were married on April 22, 1978, two weeks after the April 8, 1978, onset date of Ray's eligibility for disability insurance benefits. For the two years that followed, the Lindleys sought to conceive a child. Their inability to do so prompted them to undergo medical testing, which revealed that Mary suffered from a retroverted uterus. Mary's doctor warned her that even if she were able to conceive, the pregnancy would pose serious health risks for her. In light of that diagnosis, the Lindleys decided to adopt a child. In 1980, they began writing letters to numerous adoption agencies, asking to be put on the waiting lists that invariably exist at such institutions. See generally National Comm. for Adoption, Adoption Factbook: United States Data, Issues, Regulations and Resources 47-53 (1985) [hereafter "Adoption Factbook"]. For two years, the Lindleys searched for a child to adopt. Finally, a private adoption agency informed them of the impending birth of David, a child unrelated to either Ray or Mary. The Lindleys' application was approved, and on March 26, 1982, four days after David was born, Ray and Mary initiated formal adoption proceedings. A final order of adoption was entered on August 17, 1982.

On September 1, 1982, the Lindleys applied for CIB for David pursuant to section 202(d) of the Social Security Act. ¹ This application was denied by the Administration on February 1, 1983, and the Lindleys chose not to appeal. Concurrently, the Administration initiated a periodic investigation into Ray's continuing eligibility for disability benefits. In November of 1982, the Administration determined that Ray was no longer disabled and that his entitlement to benefits would terminate on January 31, 1983. Ray appealed, and an administrative law judge ("ALJ") reversed the termination decision on September 30, 1983, fully reinstating Ray's entitlement to benefits.

After Ray's reinstatement, the Lindleys submitted a second application for CIB on David's behalf on October 11, 1983. This application was denied by the Administration initially and upon reconsideration, causing the Lindleys to move for a hearing before an ALJ. After hearing the evidence, the ALJ held that David was precluded from receiving CIB under section 202(d)(8) because he had been adopted by the Lindleys after the date Ray became entitled to benefits. The ALJ also rejected the Lindleys' argument that David was not an "after-adopted child" ² because of the alleged break in Ray's entitlement beginning in November 1982. The ALJ's decision became the final order of the Secretary after the Appeals Council denied the Lindleys' subsequent request for review.

On September 5, 1985, Ray filed a complaint in the district court on behalf of David. In the complaint, David alleged that he is eligible for CIB under the provisions of section 202(d)(8). In the alternative, he alleged that section 202(d)(8) violates his parents' right to equal protection because it precludes them from obtaining CIB for him as an "after-adopted child," while it permits natural parents to obtain CIB for their children born after the wage earner's disability onset date.

The parties consented to having their case heard by a magistrate pursuant to 28 U.S.C. section 636(c). On April 2, 1987, the magistrate issued a decision in which he held that any hiatus in Ray's entitlement prompted by the Administration's continuing disability review did not affect the Lindleys' second CIB application because Ray's eligibility was reinstated retroactively to his initial onset date. The magistrate then upheld the constitutionality of section 202(d)(8) because he found that Congress had a rational basis for its rules governing CIB applications by "after-adopted children." David filed a timely appeal.

On appeal, David reasserts his argument that he is eligible for CIB under the provisions of section 202(d)(8) because of the temporary break in Ray's entitlement. David's principal contention, however, is that the magistrate erred in applying the rational basis test to uphold the constitutionality of section 202(d)(8), since the classification "chills" his sterile parents' fundamental right to become parents by adoption. David contends that the proper standard is strict scrutiny and that the statute cannot withstand such review. He also argues that, in any event, the statute is not even rationally related to Congress' professed purpose of deterring or preventing fraud.

II. Analysis

A fundamental principle of judicial construction requires that we consider David's statutory claim before reaching the constitutional issue. Jean v. Nelson, 472 U.S. 846, 854, 105 S.Ct. 2992, 2996-97, 86 L.Ed.2d 664 (1985); Ashwander v. TVA 297 U.S. 288, 347, 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring).

A. David's Statutory Claim

On appeal, David renews his argument that he is eligible for CIB under the statute because the September 30, 1983, decision of the ALJ, which reinstated his father's entitlement to benefits, also constituted Ray's new disability onset date. David cites Ross v. Heckler, 575 F.Supp. 322 (D.Colo.1983), in support of this contention.

In Ross, the disabled father and his wife took custody of the father's nephew and filed a petition for adoption during a fourteen-month suspension in the father's disability eligibility. A final adoption decree was not issued until after the father became eligible again for benefits. For this reason, the Secretary concluded that the child was not entitled to CIB because he was an "after-adopted child." The district court reversed. It found that under the statute, a child is "adopted" as of the time the parents take custody of the child and file a petition for adoption. The court concluded that "for the purpose of Section 402(d)(8), an adoption that occurs during a suspension in benefits falls within the meaning of 'before' as used in the first phrase following Section 402(d)(8)(B)." Id. at 325.

The district court's holding in Ross has no application here. There is nothing in the record to suggest that there was an actual break in Ray's coverage. David does not contend, nor does he present any evidence to suggest, that his father failed to receive all of his benefit payments through September 30, 1983, while Ray was appealing the Administration's erroneous determination regarding his eligibility. That appeal ultimately resulted in the reinstatement of Ray's entitlement retroactively to 1978, the original onset date of Ray's disability. Therefore, we find that the magistrate correctly decided the statutory claim.

B. David's Standing To Assert His Parents' Claim

Although Ray Lindley has brought this action on behalf of his son David, the essence of the constitutional claim is that section 202(d)(8) classifies the senior Lindleys in a manner that "chills" their right to adopt a child. The Secretary's initial argument, made for the first time on appeal, is that David is without standing. The Secretary concedes that David has suffered direct economic harm because of the Administration's denial of his parents' application for CIB on his account, but nevertheless urges us to conclude that third-party standing doctrine bars David from pressing his parents' interests. The Secretary relies on Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975), where the Court held that as a matter of prudence courts should not hear a plaintiff who rests his or her "claim to relief on the legal rights or interests of third parties," even where the plaintiff has alleged an injury sufficient to meet the "case or controversy" requirement of Article III. Id. at 499, 95 S.Ct. at 2205. ³

Because the Secretary failed to suggest in the district court that prudential considerations should bar David from suing on his parents' behalf, we cannot consider these arguments here. See Craig v. Boren, 429 U.S. 190, 193-94, 97...