Schisler v. Heckler, s. 1536

• Decision Date: 02 April 1986
• Docket Number: Nos. 1536,1569,D,s. 1536
• Citation: 787 F.2d 76
• Parties: , Unempl.Ins.Rep. CCH 16,706 Robert SCHISLER, Mary Miceli, Paulette Beard, Frank Powroznik, Rose Reese, Harry Delandro, Marjorie Hilts, Cinda Coleman, Rose Mitchell, and Kathran Tennant, on behalf of themselves and all other individuals similarly situated, Plaintiffs-Appellees-Cross-Appellants, v. Margaret HECKLER, Secretary of the U.S. Department of Health and Human Services; Barbara Blum, as Commissioner of the New York State Department of Social Services; Sidney Houben, as Director of the New York State Department of Social Services Bureau of Disability Determinations, Defendants, Margaret Heckler, Secretary of the U.S. Department of Health and Human Services, Defendant-Appellant-Cross-Appellee. ockets 85-6092, 85-6096.
• Court: U.S. Court of Appeals — Second Circuit

Page 76

787 F.2d 76

13 Soc.Sec.Rep.Ser. 186, Unempl.Ins.Rep. CCH 16,706

Robert SCHISLER, Mary Miceli, Paulette Beard, Frank Powroznik, Rose Reese, Harry Delandro, Marjorie Hilts, Cinda Coleman, Rose Mitchell, and Kathran Tennant, on behalf of themselves and all other individuals similarly situated Plaintiffs-Appellees-Cross-Appellants, v. Margaret HECKLER, Secretary of the U.S. Department of Health and Human Services; Barbara Blum, as Commissioner of the New York State Department of Social Services; Sidney Houben, as Director of the New York State Department of Social Services Bureau of Disability Determinations, Defendants Margaret Heckler, Secretary of the U.S. Department of Health and Human Services, Defendant-Appellant-Cross-Appellee.

Nos. 1536, 1569, Dockets 85-6092, 85-6096.

United States Court of Appeals Second Circuit.

Argued Aug. 14, 1985.

Decided April 2, 1986.

Frank A. Rosenfeld, Dept. of Justice, Civil Div., Appellate Staff, Washington, D.C. (Richard K. Willard, Acting Asst. Atty. Gen., Salvatore R. Martoche, U.S. Atty., W.D.N.Y., William Kanter, Atty., Civil Div., Appellate Staff, Dept. of Justice, Washington, D.C., of counsel), for defendant-appellant-cross-appellee.

Lewis Golinker, New York Lawyers for Public Interest, New York City (Bryan D. Hetherington, Catherine M. Callery, Monroe County Legal Assistance Corp., Rochester, N.Y., and Olney Clowe, Neighborhood Legal Services, Buffalo, N.Y., of

counsel), for plaintiffs-appellees-cross-appellants.

Robert Abrams, Atty. Gen. of State of N.Y., for amicus curiae State of N.Y.

Before NEWMAN and WINTER, Circuit Judges, and COFFRIN, District Judge. ^*

WINTER, Circuit Judge:

On this appeal from a judgment in favor of a class of claimants for disability benefits, the Secretary of Health and Human Services ("the Secretary") seeks review of Judge Elfvin's decision establishing as members of the class eligible for relief all Social Security disability recipients whose benefits were terminated by the Social Security Administration ("SSA") on or after June 1, 1976 under the so-called "current disability" standard. SSA challenges the inclusion of the portion of the class of disability claimants terminated between June 1, 1976 and May 11, 1980 ("contested group"), which is estimated to contain approximately 13,000 people. Plaintiffs cross-appeal on two issues. First, they seek an injunction requiring the Secretary to apply the "treating physician" rule of this court to members of the class upon remand. Second, they seek an injunction mandating improved notice to all members of the class. We affirm the district court's decision including the contested group within the class. We reverse as to both issues on the cross-appeal and remand for further proceedings.

BACKGROUND

This class action was brought on July 11, 1980, to challenge a widespread termination of disability benefits for recipients who had previously been declared eligible under the Social Security Disability Insurance program, 42 U.S.C.A. Sec. 401 et seq. (1982 & Supp.1985) and the Supplemental Security Income ("SSI") program, 42 U.S.C.A. Sec. 1381 et seq. (1982 & Supp.1985). The plaintiffs' central claim was that SSA had unlawfully altered the legal standard for terminating the benefits of claimants.

Until June, 1976, SSA had evaluated terminations under a "medical improvement" standard. This standard barred termination of recipients absent medical evidence demonstrating an improvement of a claimant's medical condition subsequent to the original determination of disability. In June, 1976, without relevant statutory change, SSA issued orders to its adjudicators to apply a stricter "current disability" standard. This new standard allowed termination whenever a recipient could not produce substantial evidence of continuing disability whether or not there was evidence of actual medical improvement. The scrutiny of particular recipients was also intensified but, in this instance, pursuant to legislative mandate. Social Security Disability Amendments of 1980, Pub.L. No. 96-265, Sec. 311(a), 94 Stat. 441, 460 (1980). Prior to March, 1981, Continuing Disability Investigations ("CDIs") were performed only in certain categories of disability cases considered by SSA to be most likely to result in terminations. After that date, SSA implemented the Social Security Amendments of 1980, which required CDIs at least once every three years for most claimants. 42 U.S.C. Sec. 421(i) (1982) amended by Pub.L. No. 98-460, Secs. 6(a), 8(a), 98 Stat. 1794, 1802, 1804 (1984) (codified at 42 U.S.C.A. Sec. 421(h)(i) (Supp.1985)).

The combination of the "current disability" standard and the greatly increased number of CDIs led to a dramatic increase in the number of terminations. More than 470,000 people had their disability benefits terminated in the three years after March, 1981, N.Y. Times, Mar. 24, 1984, at 1, col. 6, resulting in a flurry of class-actions, including the present one, challenging the termination process. See De Leon v. Secretary of Health & Human Services, 734 F.2d 930, 931 n. 1 (2d Cir.1984).

The ten named plaintiffs were disability recipients whose cases had been reviewed for termination by the State between March, 1979 and April, 1980. In August, 1981, Judge Elfvin certified a 23(b)(2) class under Rule 23(b)(2), Fed.R.Civ.P., consisting of "all persons" in New York State whose disability benefits were terminated without consideration of medical improvement. Proceedings continued, with much of the parties' attention devoted to whether an injunction should issue concerning the subclass of mentally disabled claimants. Schisler v. Heckler, 574 F.Supp. 1538 (W.D.N.Y.1983).

On October 9, 1984, Congress passed the Social Security Disability Benefits Reform Act of 1984 (the "Reform Act"), Pub.L. No. 98-460, 98 Stat. 1794 (1984). The Reform Act was intended generally to resolve the controversy concerning the standard for termination decisions and to resolve the host of lawsuits that had been spawned by that controversy. Because the Reform Act codified the "medical improvement" standard for all future termination hearings, see Reform Act Sec. 2(c), (d)(2)(A), Pub.L. No. 98-460, Sec. 2(c), (d)(2)(A), 98 Stat. 1794, 1796-97 (1984) (Sec. 2(c) codified at 42 U.S.C.A. Sec. 1382c(a)(5) (Supp.1985)), issues with respect to terminations were reduced in the present case to determining the retrospective effect of the Act on those already terminated.

In light of the Reform Act, the district court ruled on both parties' pending motions for summary judgment. In a judgment entered on December 5, 1984, 107 F.R.D. 609, the district court rejected SSA's request to define the class to include less than "all persons" affected by the policy. It also rejected SSA's argument that the court had no jurisdiction over class members who were terminated before May, 1980. The court ordered that class members' termination decisions be expeditiously remanded to the Secretary and readjudicated there under the "medical improvement" standard. Interim benefits under Sec. 2(e) of the Reform Act, Pub.L. No. 98-460, Sec. 2(e), 98 Stat. 1794, 1798 (1984), would be available for those class members who requested them.

Subsequently, both parties moved to amend the judgment. SSA again sought to reduce the class size. Plaintiffs sought injunctive relief mandating SSA compliance with this Circuit's "treating physician" rule, discussed infra. Plaintiffs also sought an order compelling the Secretary to provide the names and addresses of class members whose notices of the right to readjudication would in the future be returned to SSA as "addresses unknown", as well as the names and addresses of those class members who failed to respond. These motions were denied. Subsequent to the district court's decision, SSA sent out a notice of the right of readjudication to members of the uncontested class.

SSA appealed from the decision defining the class as including the contested group. Plaintiffs cross-appealed from the denial of the injunction with regard to the treating physician rule and from the district court's failure to grant their requests with regard to the provision of names and addresses. They also challenged the adequacy of the notice that was sent by SSA after the district court's decision. SSA then sought a stay pending appeal with regard to the remand of the contested group. On May 21, 1985, we granted a stay to be effective only upon SSA's agreeing to two conditions. The first condition entailed "a protective notice of election ... for all class members whose termination or final administrative appeal decision was issued prior to May 11, 1980, who following written notice by the Secretary, make a timely request for restored benefits," thereby ensuring that reinstated benefits would not be affected by the period of the stay. The second condition required the Secretary to transfer certain computer tapes to the State of New York within fourteen days, in order to update the SSA address list with the more complete state address list. SSA agreed to these conditions.

DISCUSSION

We discuss the scope of the class, treating physician, and notice issues seriatim.

1) The Scope of the Certified Class

The Social Security Act by its terms bars appeals from denials of disability benefits more than sixty days after mailing of the final decision of termination. 42 U.S.C. Sec. 405(g) (1982). Claimants who were terminated after May 11, 1980, (i.e., within sixty days before the filing of this action), are conceded by the SSA to be eligible for remand for a readjudication of their claims.

Section 2(d)(3)(B) of the Reform Act, Pub.L. No. 98-460, Sec. 2(d)(3)(B), 98 Stat. 1794, 1798 (1984), also mandates remand to the Secretary of any claimant

who was a member of a class certified on or before September 19, 1984, in a class action relating to medical improvement pending on September 19, 1984, but was not identified by name as a member of the class...