Ortego v. Weinberger

• Decision Date: 04 August 1975
• Docket Number: No. 74-3048,74-3048
• Citation: 516 F.2d 1005
• Parties: Arry ORTEGO, Plaintiff-Appellee, v. Caspar WEINBERGER, Secretary of Health, Education and Welfare, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1005

516 F.2d 1005

Arry ORTEGO, Plaintiff-Appellee, v. Caspar WEINBERGER, Secretary of Health, Education and Welfare, Defendant-Appellant.

No. 74-3048.

United States Court of Appeals Fifth Circuit.

Aug. 4, 1975.

Donald E. Walter, U. S. Atty., Leven H. Harris, Asst. U. S. Atty., Shreveport, La., Robert E. Kopp, David M. Cohen, Barbara L. Herwig, Dept. of Justice, Appellate Sec., Civil Div., Washington, D. C., for defendant-appellant.

Preston N. Aucoin, Ville Platte, La., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before GEWIN, DYER and ADAMS ^*, Circuit Judges.

GEWIN, Circuit Judge:

Following a 1961 automobile accident, Arry Ortego applied for disability benefits under the Social Security Act in 1963, 1967, 1971 and 1972. His first three applications were denied, and he sought no administrative review. Upon denial of his fourth application, Ortego sought the services of counsel and requested a hearing before an administrative law judge pursuant to 42 U.S.C. § 405(b). It was at the hearing that Ortego first presented physical and testimonial, as well as documentary, evidence to a quasi-judicial officer. The administrative law judge ruled that Ortego had been disabled (that is, unable to secure any substantial gainful employment) since his automobile accident in 1961. Acting pursuant to Social Security Administration regulations that allow reopening of applications for up to four years for "good cause" shown, 20 C.F.R. § 404.957(b), the administrative law judge held that Ortego was entitled to benefits under his 1972 and 1971 applications. The Appeals Council, and through it the Secretary of Health, Education and Welfare, affirmed his decision.

Dissatisfied with the four-year limitation on retroactive payments, Ortego sought review of the Secretary's determination in federal court. The district judge found that Ortego should have received benefits beginning twelve months prior to the 1963 application, ¹ because there was error manifest "on the face of the evidence" before the administrative agency. In such circumstances, an application may be reopened at any time. 20 C.F.R. § 404.957(c); see Part II, infra.

The Secretary appeals from the district court's award of benefits for the preceding twelve years. Two essential questions are presented for our review: (1) whether a district court has jurisdiction to review the Secretary's refusal to reopen the 1963 and 1967 applications, and (2) whether the Secretary abused his discretion in reopening only under the 1971 application. We find that the district court had jurisdiction, but that it erred in overturning the Secretary's determination.

I. Jurisdiction

As is often true, given the limited scope of federal judicial power, the jurisdictional issue demands our considered attention. We note, first, that four of the five Court of Appeals that have faced the question have held that federal courts have jurisdiction to review, for abuse of discretion, the Secretary's decision not to reopen prior applications. Ruiz-Olan v. Secretary of Health, Education and Welfare, 511 F.2d 1056 (1st Cir. 1975); Davis v. Richardson, 460 F.2d 772 (3d Cir. 1972); Maddox v. Richardson, 464 F.2d 617 (6th Cir. 1972); Cappadora v. Celebrezze, 356 F.2d 1 (2d Cir. 1966). Only the Ninth Circuit has held that the Secretary's decision is a matter of unfettered discretion and therefore unreviewable. Stuckey v. Weinberger, 488 F.2d 904 (9th Cir. 1973).

All courts agree that the Social Security Act does not, by its terms, provide for judicial review of refusals to reopen. 42 U.S.C. § 405(g) provides for judicial review of any final decision of the Secretary made after a hearing if commenced within sixty days of notice of the decision. The act also contains a finality provision that makes the Secretary's determinations binding after a hearing, and unreviewable except as provided in the subchapter. 42 U.S.C. § 405(h). Under Section 405(b), however, the Administration must hold a hearing in only one circumstance: when an applicant has received an adverse ex parte determination and he makes a timely request for a hearing. 42 U.S.C. § 405(b). ² The courts are agreed that the judicial review provision, 42 U.S.C. § 405(g), "was intended to apply to a final decision rendered after a hearing thus made mandatory, not to a decision which could lawfully have been made without any hearing at all . . .." Cappadora v. Celebrezze, supra, 356 F.2d at 4. Hence, since Ortego did not apply for a hearing on his first three applications, the Secretary's refusal to reopen is not reviewable under § 405(g).

Undaunted by the Act's lack of specific authorization for judicial review of the Secretary's denial, the majority of courts have held that the Administrative Procedure Act, 5 U.S.C. § 701 et seq., provides the basis for review of a decision not to reopen. Ruiz-Olan v. Secretary of HEW, supra; Davis v. Richardson, supra; Maddox v. Richardson, supra; Cappadora v. Celebrezze, supra. Cappadora, a decision authored by Judge Friendly, is the seminal case in the area. The three other Courts of Appeal have cited it for a finding of jurisdiction. Relying upon various provisions of the APA indicating a generous posture towards judicial review, the Second Circuit found that federal courts have the power to scrutinize refusals to reopen for abuse of discretion.

Section 10(a) of the APA states that "(a) person suffering legal wrong because of agency action . . . is entitled to judicial review thereof." 5 U.S.C. § 702. Section 10(e) requires reviewing courts to

(2) hold unlawful and set aside agency action, findings, and conclusions found to be

(A) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law; 5 U.S.C. § 706.

Similarly, Section 10(c) reads:

Agency action made reviewable by statute and final agency action for which there is no adequate remedy in a court are subject to judicial review. . . . 5 U.S.C. § 704.

Only the introductory clause of Section 10 places any limitations on the right to judicial review:

(a) This chapter applies, according to the provisions thereof, except to the extent that

(1) statutes preclude judicial review; or

(2) agency action is committed to agency discretion by law. 5 U.S.C. § 701.

As mentioned above, the finality provision of the Social Security Act, 42 U.S.C. § 405(h), does not preclude judicial review in the present case, because it applies only in situations where the aggrieved applicant has timely requested a hearing. A statute must demonstrate clear and convincing evidence of an intent to preclude judicial review before courts will cut off an aggrieved party's right to be heard. Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); Littell v. Morton, 445 F.2d 1207 (4th Cir. 1971); Fekete v. U. S. Steel Corp., 424 F.2d 331 (3d Cir. 1970). Where an act provides procedures for judicial review, a court cannot review an agency decision by any other means; where the act does not provide such procedures, however, "nonstatutory" review is still available. Aquavella v. Richardson, 437 F.2d 397 (2d Cir. 1971).

Nor do we agree with the Ninth Circuit, Stuckey v. Weinberger,supra, that the Secretary's refusal to reopen is irretrievably committed to his discretion. ³ When the introductory clauses and Section 10(e) are read together, we believe that the APA envisions limited review by the judiciary to ensure that administrators do not abuse the discretion granted them by Congress. Accord, L. Jaffe, Judicial Control of Administrative Action 374 (1965); cf. Littell v. Morton, supra ; Manges v. Camp, 474 F.2d 97 (5th Cir. 1973).

Having eliminated the exceptions to the presumption of reviewability contained in the APA, and armed with the strong indicators embodied in Sections 10(a), (c) and (e) that aggrieved persons have a right to review of agency action, it would seem a simple matter to hold that the APA supplies the groundwork for review of the Secretary's refusal to reopen. Our only concern is that the decisions of the First, Second, Third, and Sixth Circuits rest on the assumption that Section 10 of the APA is an independent grant of federal jurisdiction. Since Section 405(g) of the Social Security Act does not provide federal courts with jurisdiction to review refusals to reopen, prior courts that have considered the question have relied, albeit inexplicitly, on the APA as a jurisdictional wedge.

The Second Circuit has admitted as much. In Toilet Goods Assoc. v. Gardner, 360 F.2d 677, 679 n. 1 (2d Cir. 1966), aff'd 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697 (1967) the court acknowledged that in Cappadora it allowed Section 10 of the APA to operate as an independent jurisdictional grant, despite a prior holding that Section 10 was remedial. Ove Gustavsson Contracting Co. v. Floete, 278 F.2d 912 (2d Cir.), cert. denied 364 U.S. 894, 81 S.Ct. 225, 5 L.Ed.2d 188 (1960). In Aquavella v. Richardson, 437 F.2d 397, 400 nn. 9, 10 (2d Cir. 1971), on the question whether the district court had jurisdiction to review the Secretary's decision to suspend payments to a Medicare Act provider, the court was careful to note that jurisdiction was proper under 28 U.S.C. § 1331, so decision as to whether the APA served to grant jurisdiction was unnecessary. Finally, in Aguayo v. Richardson, 473 F.2d 1090, 1101-2 (2d Cir. 1973), Judge Friendly summarized the present state of the law:

We are also unwilling to follow the district court in avoiding the jurisdictional amount problem with respect to the statutory claims by reliance on § 10 of the Administrative Procedure Act, 5 U.S.C. § 702, as an independent grant of jurisdiction. The Supreme Court has not squarely faced this recurring problem. Professor Davis, Administrative Law Treatise, § 23.02 (Supp.1970), cites Rusk v. Cort, 369 U.S. 367, 82 S.Ct. 787, 7 L.Ed.2d 809 (1962) and Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, ...