Smith v. Berryhill

• Decision Date: 28 May 2019
• Docket Number: No. 17-1606,17-1606
• Citation: 139 S.Ct. 1765
• Parties: Ricky Lee SMITH, Petitioner v. Nancy A. BERRYHILL, Acting Commissioner of Social Security
• Court: U.S. Supreme Court

139 S.Ct. 1765

Ricky Lee SMITH, Petitioner

v.Nancy A. BERRYHILL, Acting Commissioner of Social Security

No. 17-1606

Supreme Court of the United States.

Argued March 18, 2019

Decided May 28, 2019

Eugene R. Fidell, Yale Law School, Supreme Court Clinic, New Haven, CT, Wolodymyr Cybriwsky, Cybriwsky Wolodymyr, Law Office, Prestonsburg, KY, Andrew J. Pincus, Paul W. Hughes, Charles A. Rothfeld, Michael B. Kimberly, Mayer Brown LLP, Washington, DC, for Petitioner.

Noel J. Francisco, Solicitor General, Department of Justice, Washington, DC, for Respondent.

Noel J. Francisco, Solicitor General, Joseph H. Hunt, Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, Michael R. Huston, Assistant to the Solicitor, General, Charles W. Scarborough, Sarah Carroll, Attorneys, Department of Justice, Washington, DC, for Respondent.

Justice SOTOMAYOR delivered the opinion of the Court.

The Social Security Act allows for judicial review of "any final decision ... made after a hearing" by the Social Security Administration (SSA). 42 U.S.C. § 405(g). Petitioner Ricky Lee Smith was denied Social Security benefits after a hearing by an administrative law judge (ALJ) and later had his appeal from that denial dismissed as untimely by the SSA's Appeals Council—the agency's final decisionmaker. This case asks whether the Appeals Council's dismissal of Smith's claim is a "final decision ... made after a hearing" so as to allow judicial review under § 405(g). We hold that it is.

I

A

Congress enacted the Social Security Act in 1935, responding to the crisis of the Great Depression. 49 Stat. 620; F. Bloch, Social Security Law and Practice 13 (2012). In its early days, the program was administered by a body called the Social Security Board; that role has since passed on to the Board's successor, the SSA.¹

In 1939, Congress amended the Act, adding various provisions that—subject to changes not at issue here—continue to govern cases like this one. See Social Security Act Amendments of 1939, ch. 666, 53 Stat. 1360. First, Congress gave the agency "full power and authority to make rules and regulations and to establish procedures ... necessary or appropriate to carry out" the Act. § 405(a). Second, Congress directed the agency "to make findings of fac[t] and decisions as to the rights of any individual applying for a payment" and to provide all eligible claimants—that is, people seeking benefits—with an "opportunity for a hearing with respect to such decision[s]." § 405(b)(1). Third, and most centrally, Congress provided for judicial review of "any final decision of the [agency] made after a hearing." § 405(g). At the same time, Congress made clear that review would be available only "as herein provided"—that is, only under the terms of § 405(g). § 405(h) ; see Heckler v. Ringer , 466 U.S. 602, 614–615, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984).

In 1940, the Social Security Board created the Appeals Council, giving it responsibility for overseeing and reviewing the decisions of the agency's hearing officers (who, today, are ALJs).² Though the Appeals Council originally had just three members, its ranks have since swelled to include over 100 individuals serving as either judges or officers.³ The Appeals Council remains a creature of regulatory rather than statutory creation.

Today, the Social Security Act provides disability benefits under two programs, known by their statutory headings as Title II and Title XVI. See § 401 et seq. (Title II); § 1381 et seq. (Title XVI). Title II "provides old-age, survivor, and disability benefits to insured individuals irrespective of financial need." Bowen v. Galbreath , 485 U.S. 74, 75, 108 S.Ct. 892, 99 L.Ed.2d 68 (1988). Title XVI provides supplemental security income benefits "to financially needy individuals who are aged, blind, or disabled regardless of their insured status." Ibid. The regulations that govern the two programs are, for today's purposes, equivalent. See Sims v. Apfel , 530 U.S. 103, 107, n. 2, 120 S.Ct. 2080, 147 L.Ed.2d 80 (2000).⁴ Likewise, § 405(g) sets the terms of judicial review for each. See § 1383(c)(3).

Modern-day claimants must generally proceed through a four-step process before they can obtain review from a federal court. First, the claimant must seek an initial determination as to his eligibility. Second, the claimant must seek reconsideration of the initial determination. Third, the claimant must request a hearing, which is conducted by an ALJ. Fourth, the claimant must seek review of the ALJ's decision by the Appeals Council. See 20 CFR § 416.1400. If a claimant has proceeded through all four steps on the merits, all agree, § 405(g) entitles him to judicial review in federal district court.⁵

The tension in this case stems from the deadlines that SSA regulations impose for seeking each successive stage of review. A party who seeks Appeals Council review, as relevant here, must file his request within 60 days of receiving the ALJ's ruling, unless he can show "good cause for missing the deadline." § 416.1468.

The Appeals Council's review is discretionary: It may deny even a timely request without issuing a decision. See § 416.1481. If a claimant misses the deadline and cannot show good cause, however, the Appeals Council does not deny the request but rather dismisses it. § 416.1471. Dismissals are "binding and not subject to further review" by the SSA. § 416.1472. The question here is whether a dismissal for untimeliness, after the claimant has had an ALJ hearing, is a "final decision ... made after a hearing" for purposes of allowing judicial review under § 405(g).

B

Petitioner Ricky Lee Smith applied for disability benefits under Title XVI in 2012. Smith's claim was denied at the initial-determination stage and upon reconsideration. Smith then requested an ALJ hearing, which the ALJ held in February 2014 before issuing a decision denying Smith's claim on the merits in March 2014.

The parties dispute what happened next. Smith's attorney says that he sent a letter requesting Appeals Council review in April 2014, well within the 60-day deadline. The SSA says that it has no record of receiving any such letter. In late September 2014, Smith's attorney sent a copy of the letter that he assertedly had mailed in April. The SSA, noting that it had no record of prior receipt, counted the date of the request as the day that it received the copy. The Appeals Council accordingly determined that Smith's submission was untimely, concluded that Smith lacked good cause for missing the deadline, and dismissed Smith's request for review.

Smith sought judicial review of that dismissal in the U.S. District Court for the Eastern District of Kentucky. The District Court held that it lacked jurisdiction to hear his suit. The U.S. Court of Appeals for the Sixth Circuit affirmed, maintaining that "an Appeals Council decision to refrain from considering an untimely petition for review is not a ‘final decision’ subject to judicial review in federal court." Smith v. Commissioner of Social Security , 880 F. 3d 813, 814 (2018).

Smith petitioned this Court for certiorari. Responding to Smith's petition, the Government stated that while the Sixth Circuit's decision accorded with the SSA's longstanding position, the Government had "reexamined the question and concluded that its prior position was incorrect." Brief for Respondent on Pet. for Cert. 15.

We granted certiorari to resolve a conflict among the Courts of Appeals. 586 U.S. ––––, 139 S.Ct. 451, 202 L.Ed.2d 345 (2018).⁶ Because the Government agrees with Smith that the Appeals Council's dismissal meets § 405(g)'s terms, we appointed Deepak Gupta as amicus curiae to defend the judgment below. 586 U.S. ––––, 139 S.Ct. 451, 202 L.Ed.2d 345 (2018). He has ably discharged his duties.

II

Section 405(g), as noted above, provides for judicial review of "any final decision ... made after a hearing." This provision, the Court has explained, contains two separate elements: first, a "jurisdictional" requirement that claims be presented to the agency, and second, a "waivable ... requirement that the administrative remedies prescribed by the Secretary be exhausted." Mathews v. Eldridge , 424 U.S. 319, 328, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). This case involves the latter, nonjurisdictional element of administrative exhaustion. While § 405(g) delegates to the SSA the authority to dictate which steps are generally required, see Sims , 530 U.S. at 106, 120 S.Ct. 2080, exhaustion of those steps may not only be waived by the agency, see Weinberger v. Salfi , 422 U.S. 749, 767, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), but also excused by the courts, see Bowen v. City of New York , 476 U.S. 467, 484, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986) ; Eldridge , 424 U.S. at 330, 96 S.Ct. 893.⁷

The question here is whether a dismissal by the Appeals Council on timeliness grounds after a claimant has received an ALJ hearing on the merits qualifies as a "final decision ... made after a hearing" for purposes of allowing judicial review under § 405(g). In light of the text, the context, and the presumption in favor of the reviewability of agency action, we conclude that it does.

A

We begin with the text. Taking the first clause ("any final decision") first, we note that the phrase "final decision" clearly denotes some kind of terminal event,⁸ and Congress' use of the word "any" suggests an intent to use that term "expansive[ly]," see Ali v. Federal Bureau of Prisons , 552 U.S. 214, 218–219, 128 S.Ct. 831, 169 L.Ed.2d 680 (2008). The Appeals Council's dismissal of Smith's claim fits that language: Under the SSA's own regulations, it was the final stage of review. See 20 CFR § 416.1472.

Turning to the second clause ("made after a hearing"), we note that this phrase has been the subject of some confusion over the years. On the one hand, the statute elsewhere repeatedly uses the word "hearing" to signify an ALJ hearing,⁹ which suggests that, in the ordinary case, the phrase here too denotes an ALJ...