Marcus v. Heckler

• Decision Date: 21 October 1985
• Docket Number: No. 85 C 453.,85 C 453.
• Citation: 620 F. Supp. 1218
• Parties: Esther MARCUS, Michelle W., by her next friend Marie W., Larry Rhyne, and Consuelo Allen, on behalf of themselves and all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of the Department of Health and Human Services, Defendant.
• Court: U.S. District Court — Northern District of Illinois

620 F. Supp. 1218

Esther MARCUS, Michelle W., by her next friend Marie W., Larry Rhyne, and Consuelo Allen, on behalf of themselves and all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of the Department of Health and Human Services, Defendant.

No. 85 C 453.

United States District Court, N.D. Illinois, E.D.

October 21, 1985.

Helen Cropper, Joseph A. Antolin, John M. Bouman, Mary Elizabeth Kopko, Martha L. Tonn, Legal Assistance Foundation of Chicago, Chicago, Ill., for plaintiffs.

Mary S. Rigdon, Asst. U.S. Atty., Chicago, Ill., for defendant.

MEMORANDUM AND ORDER

MORAN, District Judge.

Plaintiffs challenge step three in the five-step sequential evaluation process the Secretary of Health and Human Services (Secretary) has established for evaluating claims for disability benefits under the Old Age, Survivors and Disability Insurance (OASDI or Title II) program and the Supplemental Security Income (SSI or Title XVI) program of the Social Security Act, 42 U.S.C. §§ 401 et seq. and 1381 et seq.

According to regulations promulgated by the Secretary, the first three steps of the five-step process are:

Step 1 ... If you are working and the work you are doing is substantial gainful activity, we will find that you are not disabled regardless of your medical condition or your age, education, and work experience.

Step 2 ... If you do not have any impairment or combination of impairments which significantly limits your physical or mental ability to do basic work activities, we will find that you do not have a severe impairment and are, therefore, not disabled. We will not consider your age, education, and work experience. However, it is possible for you to have a period of disability for a time in the past even though you do not have a severe impairment.

Step 3 ... If you have an impairment(s) which meets the duration requirement and is listed in Appendix 1 or is equal to a listed impairment(s), we will find you disabled without considering your age, education, and work experience.

20 C.F.R. §§ 404.1520(b)-(d), 416.920(b)-(d) (1984) (emphasis added).¹ Plaintiffs claim that the Secretary is failing to make "medical equivalence findings" as required by these regulations.²

The named plaintiffs filed claims under the various Social Security disability programs: adult SSI (Larry Rhyne); child's disability (Michelle W.); widow's disability (Consuelo Allen), and surviving divorced spouse (Esther Marcus). In each case the Secretary denied disability benefits. Plaintiffs invoke the court's jurisdiction under 42 U.S.C. §§ 405(g) and 1383(c)(3) and under 28 U.S.C. § 1361.

I.

Presently before the court is plaintiffs' motion for class certification under Federal Rules of Civil Procedure 23(a) and (b)(2). The class is defined as

All persons who reside or have resided in Illinois:

(a) who have claimed or are claiming initial or continued disabled widow(er)s', disabled surviving spouse's, disabled child's, or disabled workers' benefits under the Old Age, Survivors, and Disability Insurance Benefits program and/or disability benefits under the Supplemental Security Income program of the Social Security Act; and

(b) whose claim for such benefits was or is being evaluated under the Department of Health and Human Services' (HHS) Secretary's sequential evaluation of disability, 20 C.F.R. §§ 404.1520 and 416.920; and

(c) whose claims were or are denied initially or on any administrative appeal by a decision on or after November 19, 1984; and

(d) whose claims were or are denied by a decision of "not disabled" made at or after the third step of this sequential evaluation, 20 C.F.R. §§ 404.1520(d-f), 416.920(d-f), and Part 404, Subpart P, Appendix 1.

The Secretary contests class certification on jurisdictional and procedural grounds. She claims the court lacks subject matter jurisdiction over the class because (1) class members have not exhausted their administrative remedies as required by 42 U.S.C. § 405(g); (2) class members have failed to seek judicial review of a final administrative decision within 60 days, as required by 42 U.S.C. § 405(g); and (3) mandamus jurisdiction under 28 U.S.C. § 1361 is not available to the class because 42 U.S.C. § 405(g) is the exclusive basis for jurisdiction over cases arising under the Social Security Act. Procedurally, the Secretary claims that the class does not meet the requirements of Fed.R.Civ.P. 23. We will address each of the defendant's arguments in turn.

II.

42 U.S.C. § 405(g) provides in relevant part:

Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within 60 days after the mailing to him of notice of such decision or within such further time as the Secretary may allow....

A. The Exhaustion Requirement

The Supreme Court has interpreted the second phrase of section 405(g) to require that plaintiff file a claim for benefits and that the Secretary make a final decision on that claim. Although the Court has referred to the whole section as jurisdictional, Califano v. Yamasaki, 442 U.S. 682, 703, 99 S.Ct. 2545, 2558, 61 L.Ed.2d 176 (1979), the Court has also held that the filing requirement is non-waivable³ while the finality or exhaustion requirement is waivable by the Secretary or the courts. Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984); Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). Three factors are used to determine whether to waive the exhaustion requirement: the collateral nature of the suit to a claim for benefits, the futility of pursuing administrative remedies, and the harm plaintiffs will suffer pending exhaustion.⁴Johnson v. Heckler, 769 F.2d 1202 (7th Cir.1985); City of New York v. Heckler, 742 F.2d 729 (2d Cir.1984). No one factor is crucial; rather, a pragmatic combination of all three is necessary to determine if the requirement should be waived. City of New York, 742 F.2d at 736; Mental Health Association of Minnesota v. Heckler, 720 F.2d 965 (8th Cir. 1983).

The parameters of the collateral claim test are set by Eldridge and Ringer. In Eldridge, the Court considered a due process challenge to the Secretary's policy of providing a post-termination hearing to disability recipients. The Court held that "Eldridge's constitutional challenge is entirely collateral to his substantive claim of entitlement," making deference to the agency's determination unnecessary. Eldridge, 424 U.S. at 330, 96 S.Ct. at 900. In Ringer, plaintiffs challenged the Secretary's ruling that she would not reimburse expenses for bilateral carotid body resection surgery. The Court held that "it makes no sense to construe the claims of ... respondents as anything more than, at bottom, a claim that they should be paid for their BCBR surgery" because if they prevailed in court "only essentially ministerial details will remain before respondents would receive reimbursement." Ringer, 104 S.Ct. at 2021-22. The Court also noted that "whatever constitutional claims respondents assert are clearly too insubstantial to support subject matter jurisdiction." Id. at 2018, n. 4.

The present case does not fall squarely within either Eldridge or Ringer. However, plaintiffs' claims here are significantly closer to the former than the latter. Plaintiffs challenge a procedure rather than substantive standards of eligibility; the redress they seek will not necessarily result in the payment of benefits. Johnson, supra, 769 F.2d at 1208; City of New York, 742 F.2d at 737. See also Polaski v. Heckler, 751 F.2d 943, 954 (8th Cir.1985). As was true in Johnson, "far more than mere `ministerial details' will have to be adjudicated before the plaintiffs can be awarded benefits." Id. at 1208. Given the posture of this case, the court holds that the plaintiffs' claims are sufficiently collateral to their entitlement to benefits to justify waiver.

Exhaustion would also be futile. Plaintiffs claim that the Secretary has taken a final position on the issue of "medical equivalence findings" by excluding this step from each class member's disability determination proceeding. The Secretary does not refute this claim. Here, as in Eldridge,

it is unrealistic to expect that the Secretary would consider substantial changes in the current administrative review system at the behest of a single aid recipient raising a constitutional challenge in an adjudicatory context.

Id. 424 U.S. at 330, 96 S.Ct. at 900. Under these circumstances plaintiffs need not exhaust their administrative remedies. See Johnson, 769 F.2d at 1208; Polaski, 751 F.2d at 953 (deference to Secretary unnecessary when "no further elaboration of agency policy is likely"). As the court said in City of New York, further exhaustion is futile because plaintiffs claim "a procedural right, guaranteed by the Secretary's regulations, which cannot be vindicated by an ultimate determination of eligibility." 742 F.2d at 737; see also Read v. Heckler, 756 F.2d at 784. In this sense, the present case differs significantly from Ringer, where the Court found that exhaustion was not futile because the plaintiffs' claims could be vindicated through the administrative process. 104 S.Ct. at 2023-24.

Lastly, plaintiffs here complain of a harm that cannot be remedied by retroactive payment of benefits. The injury they claim is fundamentally one of due process which no amount of money given on an individual basis can correct. In this circumstance, plaintiffs have shown sufficient harm to waive the exhaustion requirement. See Ringer, 104 S.Ct. at 2023; Mental Health Association of Minnesota, 720 F.2d at 971.

B. Sixty-Day Limitation

42 U.S.C. § 405(g) allows for judicial review of the Secretary's final decision if a complaint is filed within 60 days of the decision. Defendant argues that this provision is jurisdictional and therefore a nonwaivable bar...