Rosetti v. Shalala

• Decision Date: 09 March 1994
• Docket Number: No. 92-1909,92-1909
• Citation: 12 F.3d 1216
• Parties: A, Unempl.Ins.Rep. CCH (P) 17657A, 4 NDLR P 302 Peter ROSETTI; Mary Doe, individually and on behalf of all others similarly situated v. Donna SHALALA, * Secretary of Health and Human Services, Peter Rosetti and Mary Doe, Appellants.
• Court: U.S. Court of Appeals — Third Circuit

Page 1216

12 F.3d 1216

43 Soc.Sec.Rep.Ser. 282A, Unempl.Ins.Rep. CCH (P) 17657A,

4 NDLR P 302

Peter ROSETTI; Mary Doe, individually and on behalf of all others similarly situated v. Donna SHALALA, ^* Secretary of Health and Human Services, Peter Rosetti and Mary Doe, Appellants.

No. 92-1909.

United States Court of Appeals Third Circuit.

Argued June 7, 1993.

Decided Dec. 15, 1993.

Sur Petition for Rehearing March 9, 1994.

Catherine C. Carr (Argued), James M. Lafferty, Marian C. Nowell and Thomas D. Sutton, Community Legal Services, Philadelphia, PA, for appellants.

Howard S. Scher (Argued), Leonard Schaitman, U.S. Dept. of Justice, Civil Div., Appellate Staff, Washington, DC, for appellee.

Before: GREENBERG, NYGAARD and LEWIS, Circuit Judges.

OPINION OF THE COURT

LEWIS, Circuit Judge.

The plaintiffs in this case, Peter Rosetti and a woman using the pseudonym Mary Doe, filed a class action complaint alleging that the Secretary of Health and Human Services ("the Secretary") had violated the Administrative Procedures Act ("APA"), 5 U.S.C. Sec. 551 et seq., by using invalid rules and policies to determine whether people infected with the human immunodeficiency virus ("HIV") were entitled to disability benefits. Rosetti and Doe have HIV. At the time they filed their complaint, the Social Security Administration ("SSA") had denied their applications for benefits. They had appealed those decisions within the SSA's administrative review process but had not received final rulings from the agency.

Rosetti and Doe moved for class certification soon after filing their complaint. While the motion for certification was pending, administrative law judges ("ALJ") ruled that they were entitled to disability benefits.

The district court dismissed the plaintiffs' motion for class certification without prejudice and then dismissed part of the case for lack of subject matter jurisdiction; approximately five months later, it dismissed the remainder of the case, sua sponte, under Rule 12(b)(6) of the Federal Rules of Civil Procedure. ¹ The plaintiffs have appealed from the decisions dismissing the case, as well as from the district court's decision to dismiss their motion for class certification without prejudice.

We conclude that the district court acted without Article III jurisdiction in dismissing the case, because the named plaintiffs' claims became moot when the SSA granted them benefits. ² For the same reason, we cannot reach the merits of their appeal. The case does, however, raise one question that the district court retained constitutional authority to consider: the propriety of certifying a class. The district court never addressed that issue. Consequently, we will vacate the challenged orders and remand the case so that the district court may determine whether a class should be certified.

I.

The questions this case raises require us to review its legal, factual and procedural background at some length.

The plaintiffs allege that in evaluating claims for disability benefits filed by people with HIV, the Secretary ³ has used overly narrow criteria that fail to recognize some of the ways in which the virus can cause disabling impairments. Consequently, they contend, HIV victims who are in fact disabled, but who suffer from symptoms of the virus that the SSA's rules and policies have overlooked, are not awarded benefits to which they should be entitled.

The SSA administers two programs that provide disability benefits. The Social Security Disability Insurance Program ("SSDI") 42 U.S.C. Sec. 401 et seq., provides benefits to disabled people who have made contributions to the program. The Supplemental Security Income Program (SSI), 42 U.S.C. Sec. 1381 et seq., provides benefits to disabled people who are indigent. The plaintiffs sought to represent a class that included applicants to both programs, as each employs the same statutory and regulatory criteria to determine whether an applicant is disabled and therefore eligible for benefits.

The statutes establishing SSDI and SSI define "disability" as "the inability to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment...." 42 U.S.C. Secs. 423(d)(1)(A), 1382c(a)(3)(A). "An individual shall be determined to be under a disability," the statutes continue, only if his impairments "are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other substantial gainful work which exists in the national economy...." 42 U.S.C. Secs. 423(d)(2)(A), 1382c(a)(3)(B).

The SSDI and SSI statutes authorize the Secretary to adopt rules and regulations for implementing the programs. 42 U.S.C. Secs. 405(a), 1383(d)(1). Under those regulations, the SSA evaluates claims for benefits using a five-step process, ⁴ which the Supreme Court has described as follows:

The first two steps involve threshold determinations that the claimant is not presently working, and has an impairment which is of the required duration and which significantly limits his ability to work. See 20 CFR Secs. 416.920(a) through (c) (1989). In the third step, the medical evidence of the claimant's impairment is compared to a list of impairments presumed severe enough to preclude any gainful work. See 20 CFR pt. 404, subpt. P.App. 1 (pt. A) (1989). If the claimant's impairment matches or is "equal" to one of the listed impairments, he qualifies for benefits without further inquiry. Sec. 416.920(d). If the claimant cannot qualify under the listings, the analysis proceeds to the fourth and fifth steps. At these steps, the inquiry is whether the claimant can do his own past work or any other work that exists in the national economy, in view of his age, education, and work experience. If the claimant cannot do his past work or other work, he qualifies for benefits. Secs. 415.920(e) and (f).

Sullivan v. Zebley, 493 U.S. 521, 525-26, 110 S.Ct. 885, 888-89, 107 L.Ed.2d 967 (1990). The plaintiffs brought this suit to challenge the way that claims for benefits based on HIV-related illness have been handled at the third step of this five-step process. As the Court stated, id., in step three, the SSA determines whether a claimant's impairment matches or "equals" an impairment contained in the listing that appears in the federal regulations governing benefits programs. See 20 C.F.R. pt. 404, subpt. P. app. 1 (1992). ⁵ The list of impairments appearing in the regulations is called, appropriately enough, the Listing of Impairments. According to the plaintiffs, claims filed by people with HIV have been wrongly denied because the Listing of Impairments, and the way in which the SSA has instructed its officials to compare symptoms of HIV to the impairments included in the Listing, fail to account for some disabling manifestations of the virus. As a result, the plaintiffs contend, these claimants do not qualify for benefits at step three. Instead, the officials evaluating their claims move on to steps four and five. The plaintiffs argue that because of the nature of the inquiry that occurs at those steps, as well as the common characteristics of people with HIV, claimants who should but do not qualify for benefits at step three are in no way assured of receiving favorable rulings at steps four and five.

A claimant who is not satisfied with the SSA's initial ruling on his or her claim for disability benefits may appeal that decision through the agency's administrative review process. State agencies acting on behalf of the SSA make the initial evaluations of social security claims. 42 U.S.C. Secs. 421(a), 1383b(a). Claimants who choose to challenge those decisions may ask for de novo reconsideration by the same state agency. 20 C.F.R. Secs. 404.907, 416.1407 (1992). Next, a claimant can request and receive a hearing before an ALJ with the SSA's Office of Hearings and Appeals. 42 U.S.C. Secs. 405(b)(1), 1383(c)(1); 20 C.F.R. Secs. 404.929, 416.1429 (1992). Finally, claimants wishing to challenge an ALJ's decision may bring an appeal before the SSA's appeals council. 20 C.F.R. Secs. 404.967-404.982, 416.1467-416.1482 (1992). After completing this review process and thus exhausting their administrative remedies, disappointed claimants may challenge a final agency decision by filing suit in the district court. See Bowen v. City of New York, 476 U.S. 467, 478-486, 106 S.Ct. 2022, 2029-33, 90 L.Ed.2d 462 (1986) (discussing limitations period and exhaustion requirement for challenging agency action in district court).

The Centers for Disease Control ("CDC") first identified the disease now known as Acquired Immune Deficiency Syndrome ("AIDS") in the summer of 1981. The SSA started receiving claims for disability benefits filed by people with AIDS in late 1982. HIV was discovered in 1983 and definitively shown to cause AIDS in 1984. See Jon Cohen, AIDS Research: The Mood is Uncertain, 260 Science 1254, 1258 (1993). In April, 1983, the SSA issued an emergency teletype that contained the first instructions its officials received for evaluating AIDS-related claims.

Again, when SSA officials ⁶ evaluate a claim for benefits, they compare the claimant's impairment with the listed impairments appearing in the regulations. Until quite recently, however, there was nothing in the regulations to which symptoms of HIV or AIDS could be compared. In order to enable its officials to handle claims based on HIV- or AIDS-related illness, the SSA provided them with official "guidance," beginning with the emergency teletype in 1983. This guidance consisted of Social Security Rulings, ⁷ materials included in the SSA's operating guide, ⁸ and notices circulated within the agency. These materials instructed officials evaluating claims that certain conditions resulting from HIV or AIDS should be treated as matching or medically equivalent to a listed impairment; claimants exhibiting the symptoms described in the...