Lonzollo v. Weinberger, 75-1212

• Decision Date: 15 March 1976
• Docket Number: No. 75-1212,75-1212
• Citation: 534 F.2d 712
• Parties: Vito A. LONZOLLO, Plaintiff-Appellant, v. Caspar W. WEINBERGER, in his capacity as Secretary of the Department of Health, Education and Welfare, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 712

534 F.2d 712

Vito A. LONZOLLO, Plaintiff-Appellant, v. Caspar W. WEINBERGER, in his capacity as Secretary of the

Department of Health, Education and Welfare,

Defendant-Appellee.

No. 75-1212.

United States Court of Appeals, Seventh Circuit.

Argued May 20, 1975.

Decided March 15, 1976.

Frederick J. Daley, Jr., Cook County Legal Asst. Foundation, Harvey, Ill., for plaintiff-appellant.

Samuel K. Skinner, U. S. Atty., Alexander D. Kerr, Jr., Asst. U. S. Atty., Chicago, Ill., for defendant-appellee.

Before FAIRCHILD, Chief Judge, and PELL and TONE, Circuit Judges.

FAIRCHILD, Chief Judge.

This appeal presents the questions whether an applicant for Disability Insurance Benefits was denied his right to a hearing when the HEW Appeals Council, reversing on sua sponte review a decision of an Administrative Law Judge (ALJ) favorable to the applicant, considered evidence that was not presented at the hearing before the ALJ; and whether the applicant should be deemed to have waived an adequate opportunity to refute such evidence. The district court, affirming the decision of the Appeals Council, dismissed the complaint. We reverse.

On October 13, 1971 appellant Lonzollo applied for Disability Insurance Benefits under §§ 216(i) and 223 of the Social Security Act, 42 U.S.C. §§ 416(i) and 423. After his application had been twice denied, appellant requested a hearing, as was his right in accordance with 42 U.S.C. § 405(b) and 20 C.F.R. § 404.917. On January 18, 1973, a hearing was held before an Administrative Law Judge in Chicago (appellant's home area). The ALJ found that appellant was disabled as that term is defined in the Social Security Act, beginning on February 16, 1971, as claimed, and that appellant was entitled to disability benefits.

On March 22, 1973 the Appeals Council of the Social Security Administration, HEW, wrote appellant informing him that the Appeals Council, on its own motion, had decided to review the ALJ's decision. The letter stated that the Council wished additional medical evidence and would make arrangements to have appellant examined. The letter invited him to submit further evidence or statement by mail within 20 days, and offered an opportunity to appear in person before the Council in Arlington, Virginia to present oral argument. The time for such argument would be set if he made a request.

Appellant responded by letters objecting to further delay in the proceeding, and asking payment under the ALJ's decision. On May 18, however, appellant appeared at the office of Dr. James W. Erlenborn at Glen Ellyn, Illinois, apparently pursuant to arrangements initiated by the Appeals Council. Dr. Erlenborn reported, in part, that he could "find no physical findings to explain the patient's symptoms or complaints and his complaints are entirely subjective . . . I am unable to make any specific diagnoses at this time."

On July 2, 1973 a member of the Appeals Council wrote appellant stating that the Council had "received additional evidence which we propose to include in the record of your case. This evidence is enclosed for your information and to give you the opportunity to comment upon it if you wish." The evidence referred to was the Erlenborn report, a statement of Dr. Erlenborn's professional qualifications, and material from the file of a VA hospital where Lonzollo had been treated. Appellant responded by letter July 8, 1973, commenting upon parts and disputing parts of the Erlenborn report.

On October 1, 1973, the Appeals Council issued its decision reversing the decision of the ALJ, and denying benefits. It is clear from the text of the decision that the Appeals Council relied on the conclusions expressed by Dr. Erlenborn.

Government counsel does not dispute appellant's right to a hearing. The impact of the due process hearing requirement on Social Security disability benefits is somewhat different from that on the type of benefits involved in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). Mathews v. Eldridge, --- U.S. ----, 96 S.Ct. 893, 47 L.Ed.2d 18, 44 U.S.L.W. 4224, 1976. Whatever may be the minimum constitutional requirements, 42 U.S.C. § 405(b) requires the Secretary of HEW to give an applicant an opportunity for a hearing, and, if a hearing is held, to make his decision "on the basis of evidence adduced at the hearing." Government counsel appears to argue that appellant's right to a hearing was fulfilled by appellant's face to face evidentiary hearing before the ALJ. We think the argument untenable because the final decision was based in part on evidence not presented at that hearing, nor at any other hearing as to which appellant had notice and an opportunity to present evidence in rebuttal.

The government contends that oral argument before the appellant body within the administrative decision-making structure is not a matter of right, citing Prunchak v. Weinberger, 375 F.Supp. 152 (C.D.Cal.1974). We agree as a general proposition, but find the deficiency in this case to be fact-finding by the appellate tribunal on the basis of evidence not introduced at a hearing. Appellant does assert that he was unable, because of limited resources, to present oral argument in Virginia, or to obtain a representative to do so. His financial inability is plausible under the circumstances,...