Powell v. Heckler

• Decision Date: 02 May 1986
• Docket Number: No. 85-3016,85-3016
• Citation: 789 F.2d 176
• Parties: , Unempl.Ins.Rep. CCH 16,621, Unempl.Ins.Rep. CCH 17,341 Joseph POWELL, Appellant, v. Margaret M. HECKLER, Secretary of Health & Human Services.
• Court: U.S. Court of Appeals — Third Circuit

Page 176

789 F.2d 176

13 Soc.Sec.Rep.Ser. 309, Unempl.Ins.Rep. CCH 16,621,

Unempl.Ins.Rep. CCH 17,341

Joseph POWELL, Appellant, v. Margaret M. HECKLER, Secretary of Health & Human Services.

No. 85-3016.

United States Court of Appeals, Third Circuit.

Argued Jan. 14, 1986.

Original Opinion Decided Feb. 18, 1986.

Amended Opinion Decided May 2, 1986.

Martin Singer, John McTiernan (argued), McArdle, Caroselli, Spagnolli & Beachler, Pittsburgh, Pa., for appellant.

J. Alan Johnson, U.S. Atty., Anthony M. Mariani, Asst. U.S. Atty., Pittsburgh, Pa., for appellee; Beverly Dennis, III, Regional Atty., John E. Newton, Jr. (argued), Asst. Regional Atty., Philadelphia, Pa., of counsel.

Before ADAMS and HUNTER, Circuit Judges and FISHER, District Judge ^*.

AMENDED OPINION OF THE COURT

CLARKSON S. FISHER, District Judge.

This appeal raises a novel issue concerning the scope of the review which may be undertaken by the Appeals Council of the Social Security Administration where a claimant, aggrieved by only one aspect of the determination of the administrative law judge (ALJ), requests review of a narrow aspect of the ruling. Also in question is the notice to which the claimant is entitled, if any, where the Appeals Council's review goes substantially beyond the question originally presented. For the reasons which follow, we reverse. Our decision here makes it unnecessary to reach other questions suggested by the record, particularly whether the determination below is supported by substantial evidence. 42 U.S.C. Sec. 405(g).

Appellant is a 59-year old former steel foundry worker with a seventh grade education. He stopped working on August 27, 1981, when his foundry was closed, and applied for disability benefits on November 30, 1981, alleging a history of respiratory ailments. The record contains references to pneumoconiosis, silicosis, asbestosis, and bronchitis.

A hearing was conducted before an ALJ on July 1, 1982, during which appellant testified that he had been able to continue working until the closing of his plant only because his quotas were reduced as part of the phasing out of production. In a decision dated August 3, 1982, the ALJ determined that appellant was incapable of substantial gainful employment and was entitled to benefits as of January 1, 1982. Appellant, satisfied with this determination, urged however that August 27, 1981, rather than January 1, 1982, should have been fixed as his date of onset. Therefore, on August 20, 1982, timely application was made pursuant to 20 C.F.R. Sec. 404.967 ¹ for Appeals Council review of the onset date. There were no further proceedings in the matter until May 16, 1983, when the Appeals Council notified appellant that his request for review had been granted. The notification, however, further advised that upon evaluation of the entire record the Council had concluded that appellant did not have a "severe impairment" nor was he under a "disability" within the meaning of the Social Security Act. The Appeals Council therefore proposed to reverse the determination of the ALJ and this action became the final decision of the Secretary on August 23, 1983. The date of onset question was never addressed by the Appeals Council.

Significantly, there is no indication in the record that, between August 3, 1982, and May 16, 1983, the Secretary provided appellant with any notice of her intent to challenge the ALJ's underlying disability determination. Such notice would clearly have been required within 60 days of the ALJ's decision under 20 C.F.R. Sec. 404.969 ² had not appellant himself sought review. It is also noteworthy that during this period he was awarded workers compensation benefits by the Commonwealth of Pennsylvania on March 25, 1983.

Appellant filed a complaint in the District Court for Western Pennsylvania on September 6, 1983, seeking reversal of the Secretary's decision. The matter was then referred to a United States Magistrate. The following arguments were made on behalf of appellant in the District Court:

1. The Appeals Council erred in reversing the ALJ's decision which was supported by substantial evidence.

2. The Appeals Council erred by failing to limit its evaluation to the single issue raised by appellant.

3. The Appeals Council erred by failing to consider updated physician's reports which were supplied by appellant after the ALJ's decision and prior to the Council's final ruling.

The Magistrate recommended that the final determination of the Secretary be affirmed. The recommendation found the Secretary's conclusion to be supported by substantial evidence, rejected appellant's argument regarding the scope of review. ³ and omitted mention of the additional medical evidence as well as appellant's favorable determination from the Pennsylvania Workers Compensation Bureau. The District Court adopted the Magistrate's report and recommendation and granted the Secretary's cross-motion for summary judgment on December 5, 1984.

As noted previously, we do not reach the issue, so frequently the focus of this type of appeal, of whether the Secretary's determination is supported by substantial evidence or the issue pertaining to appellant's new medical evidence and compensation award. Instead, we reverse and remand, because the Appeals Council was wrong in extending the scope of review without proper notice to the claimant.

The Appeals Council, as is noted in the margin, is explicitly authorized "within 60 days after the date of a hearing decision" to "decide to review the action that was taken." 20 C.F.R. Sec. 404.969. Similarly, a claimant may request Appeals Council review by filing an application within 60 days of receiving notice of the decision. 20 C.F.R. Sec. 404.967 and Sec. 404.968. The regulations, however, are silent as to the scope of the review which may be undertaken by the Council upon a request such as Mr. Powell's. Therefore the questions are whether the Council's review is limited to the narrow issue raised by claimant or may the Council sua sponte, and without further notice, review the entire record for the purpose of reversing the ALJ's original disability finding. If the latter course is chosen, a secondary question arises: whether or not the Appeals Council should still notify the claimant who has himself sought review, within time, of its intention to undertake the broader examination. Neither appellant nor appellee has cited any controlling regulation, statute, or decision to the court.

Within certain parameters, courts must generally accord substantial deference to administrative agencies in areas such as fact-finding, Estep v. Richardson, 459 F.2d 1015, 1016 (4th Cir.1972); Ferenz v. Folsom, 237 F.2d 46, 49 (3d Cir.1956), and policy-making, I.C.C. v. Inland Waterways Corp., 319 U.S. 671, 691, 63 S.Ct. 1296, 1307, 87 L.Ed. 1655 (1942); Schuman Company v. Nelson 219 F.2d 627, 630 (3d Cir.1955). No such tolerance, however, is required in matters pertaining strictly to an agency's observance and implementation of its self-prescribed procedures. The courts, to protect due process, must be particularly vigilant and must hold agencies, such as the Social Security Administration, to a strict adherence to both the letter and the spirit of their own rules and regulations. Accordingly, the following considerations require us to reverse.

First, the unembellished language of Sec. 404.969 entitles claimants to notice within 60 days where the Appeals Council plans a review. There is nothing on the face of Sec. 404.969 which absolves the Council of its self-imposed duty to provide timely notification of review simply because the claimant has previously filed for reconsideration under Sec. 404.967. When the review anticipated by the Council is to be substantially greater than, or entirely different from, that requested, such notice albeit "counter-notice" of a sort, is neither redundant nor superfluous but rises to the level of necessity.

The point is made by the facts of this case. When nine months passed without notification of the broad scope of review intended by the Appeals Council, appellant had no reason to suspect that his disability determination would not be accorded the full repose to which it was entitled upon the running of the prescribed 60-day period. Moreover, the wholesale reassessment of the record ostensibly generated by the limited application for reconsideration effectively reduced whatever notice appellant might have had to a nullity. The fact that the Council entirely ignored the original issue raised by appellant succinctly underscores the point. If the Secretary had intended that a claimant's notice of appeal should invite full review of all aspects of the underlying administrative determination, she could easily have reserved this right and expressed her intention in the regulation, thereby warning applicants of the risk they take when seeking review. In the absence of such an articulation, it would be improper for us to construe the regulation to mean what the Secretary might have intended but did not adequately express. Usery v. Kennecott Copper Corp., 577 F.2d 1113, 1117 (10th Cir.1977). "In fairness to the regulated, the provisions of the regulations should not be deemed to include what the administrator, exercising his delegated power, might have covered but did not cover." Tobin v. Edward S. Wagner Co., 187 F.2d 977, 979 (2d Cir.1951).

Additionally, statutes and regulations should be read and construed as a whole and, wherever possible, given a harmonious, comprehensive meaning. See Weinberger v. Hynson, Westcott and Dunning, 412 U.S. 609, 631-632, 93 S.Ct. 2469, 2484, 37 L.Ed.2d 207 (1973); United States v. Stauffer Chemical Co., 684 F.2d 1174, 1184 (6th Cir.1982); Ashcroft v. United States Dept. of Interior, 513 F.Supp. 595, 598 (D.Ariz.1981). We therefore look to and find support in the Secretary's overall regulatory scheme. We note that if the court were to accept the Secretary's view, the 60-day limit...