Smith v. Heckler

• Decision Date: 06 June 1984
• Docket Number: No. Civ. S-83-1609 EJG.,Civ. S-83-1609 EJG.
• Citation: 595 F. Supp. 1173
• Parties: Robert SMITH, Joe Dias, Madge Hanna, and Bob Williams, as individuals; on behalf of themselves and all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of the Department of Health and Human Services, and Martha McSteen, Acting Commissioner of the Social Security Administration, Defendants.
• Court: U.S. District Court — Eastern District of California

595 F. Supp. 1173

Robert SMITH, Joe Dias, Madge Hanna, and Bob Williams, as individuals; on behalf of themselves and all others similarly situated, Plaintiffs, v. Margaret HECKLER, Secretary of the Department of Health and Human Services, and Martha McSteen, Acting Commissioner of the Social Security Administration, Defendants.

No. Civ. S-83-1609 EJG.

United States District Court, E.D. California.

June 6, 1984.

Carole F. Grossman, Yolo County Legal Center for the Elderly, Woodland, Cal., Bruce J. Hagel, Olson, Connelly & Hagel, Sacramento, Cal., for plaintiffs; Manuel A. Romero, Legal Services of Northern California, Yolo County Law Office, Woodland, Cal., Roberta Ranstrom, Sacramento, Cal., Peter Komlos-Hrobsky, Natl. Senior Citizens, Los Angeles, Cal., Eileen Sweeney, Natl. Senior Citizens, Washington, D.C., of counsel.

Joseph Maloney, Asst. U.S. Atty., Sacramento, Cal., for defendants; Dennis J. Mulshine, Asst. Regional Atty., Dept. of Health and Human Services, San Francisco, Cal., of counsel.

MEMORANDUM OF DECISION

EDWARD J. GARCIA, District Judge.

Plaintiffs, four named individuals who claim to be disabled, have filed this action seeking to represent a class whose members challenge the procedures and regulations used by the defendants in making disability determinations. Plaintiffs alleged that they and other class members similarly situated have had or will have claims for benefits summarily denied by the defendants on the basis of what the challenged regulation and rulings refer to as "non-severe impairments".

Plaintiffs filed motions for class certification and a preliminary injunction to enjoin the defendants' use of the challenged regulations and rulings. The matter was referred to United States Magistrate Esther Mix pursuant to 28 U.S.C. § 636, et seq., and Local Rule 305(a)(2). Magistrate Mix filed proposed Findings and Recommendations on April 4, 1984. That Recommendation is attached and reproduced in full as an appendix to this opinion. She recommends that plaintiffs' motions for class certification and a preliminary injunction be granted except for plaintiffs' request for an order requiring notice to class members that they may reapply for benefits. The Magistrate has recommended that such request be continued until further discovery and hearings may be had. Plaintiffs have indicated in their reply brief that they do not oppose such a continuance.

The defendants have filed written objections to the recommendation claiming that class certification and a preliminary injunction should not be granted. Plaintiffs responded with a reply addressing those objections. This court has examined de novo the original pleadings and other documents on file in addition to the Magistrate's recommendation and the opposition and reply briefs by the respective parties.

The Class Action

Plaintiffs define their proposed class as those persons residing in the Ninth Circuit whose claims for disability benefits under Title II or XVI of the Social Security Act have been or will be denied on the basis of a finding of no severe impairment, without a finding as to whether the claimant is able to do his past relevant work or whether, considering age, education and previous work experience, such claimant can do other work. Plaintiffs would have the class open on February 26, 1979, the date that the challenged regulations were implemented.

Defendants object to class certification on the basis of jurisdiction and on the assertion by defendants that the named plaintiffs are not adequate representatives of the class. Defendants argue that only persons admitting to a "non-severe" impairment are proper representatives. Defendants rely upon their interpretation of Delgado v. Heckler, 722 F.2d 570 (9th Cir.1983) as authority for this contention. However, this court fails to find any such holding in the Delgado case. Delgado was an action by a single plaintiff seeking review of the Secretary's denial of his claim under the "non-severe" impairment regulation. The plaintiff did not seek a preliminary injunction or class certification. The Ninth Circuit chose not to rule on the challenge to the regulation because it concluded that there was no substantial evidence to support the finding of "non-severe" in Delgado's case. Moreover, in the instant case, the challenged regulations have, in fact, been applied to the named plaintiffs and, therefore, they are adequate representatives of other class members whose claims have been denied by similar application of the same regulations.

Defendants also contend that this court lacks jurisdiction over the claims of all class members who have not exhausted administrative remedies and/or timely sought judicial review. 42 U.S.C. §§ 405(g) and 1383(c)(3) require commencement of a civil action within 60 days after a final decision by the defendants. This argument was raised previously by the defendants and was carefully considered in the Magistrate's recommendation. As noted by the Magistrate, the Supreme Court held in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1975), that the exhaustion requirement should be waived where the plaintiffs' claims are collateral to the demand for benefits and where plaintiff's interest in prompt judicial relief is so great that deference to the agency's judgment is inappropriate. It was further held in Weinberger, et. al. v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), that the exhaustion requirement is not jurisdictional but could be waived. The court noted in Salfi that the purpose of exhaustion is to prevent premature interference with agency processes and to provide the agency with an opportunity to correct its own errors. Defendants in this case do not argue or concede that their use of the challenged regulations is an error for which they seek the opportunity to correct. The defendants' pleadings are clear that if exhaustion were required for each class member, the very regulations that are challenged as being unlawful would be applied upon further administrative review. The exhaustion requirement should be waived in cases where it "would not merely be futile for the applicant, but would also be a commitment of administrative resources unsupported by any administrative or judicial interest." Lopez v. Heckler, 725 F.2d 1489, 1500 (9th Cir.1984), citing Salfi, 422 U.S. at 765-66, 95 S.Ct. at 2466-67. Defendants' argument concerning exhaustion and class representation in this case would require each class member to admit to a "non-severe impairment," that by definition under the Secretary's regulations would result in a denial of benefits, and also pursue each step of the administrative appeal process before being able to challenge the validity of the regulations. For the above stated reasons, the exhaustion requirement would be futile and serves no judicial or administrative purpose in this case. It is, therefore, waived.

Moreover, as noted in the Magistrate's recommendation, even if the class as now certified is later found to be overly broad, the certification order may be amended as necessary pursuant to Rule 23(d)(4); 23(d), Fed.R.Civ.P.

Defendants' initial brief in opposition to class certification raised issues of numerosity and the appropriateness of class relief. Those issues were disposed of in the Magistrate's recommendation, and defendants did not resubmit those arguments in its objection to that recommendation. However, this court has reviewed those issues, de novo, and finds good cause for adopting the Magistrate's proposed findings that the class fulfills the requirements of Fed.R.Civ.P. 23(a) regarding numerosity and Fed.R.Civ.P. 23(b)(2) for the type of relief sought.

The Preliminary Injunction

The defendant's objection to the recommendation for a preliminary injunction appears to be based on the defendant's characterization of such a remedy as "extreme, far ranging, disruptive, and unprecedented relief." Defendant further contends that a preliminary injunction would award plaintiffs the ultimate relief to which they would be entitled should they prevail. Defendants urge that "a preliminary injunction simply is not, and never has been, an appropriate vehicle for the final resolution of an action on the merits."

However, plaintiffs' motion for preliminary injunction does not seek or require a judgment on the merits. The recommended preliminary injunction would not award plaintiffs their "ultimate relief" available if they prevailed in their claims for benefits. The proposed order does not specifically direct payment of benefits but seeks to enjoin the defendants' continued use of the regulations and rulings that are challenged as being facially inconsistent with the Social Security Act and contrary to the well established case law of this and other circuits. Only if the defendants found the plaintiffs disabled under the remainder of the sequential analysis would benefits be paid.

Defendants further object to the proposed preliminary injunction because of what they consider "a total lack of controlling persuasive judicial authority to support the Magistrate's recommendation." Defendants' assertion appears to address the question of the disputed regulations' validity. Defendants' position is that no controlling or persuasive case authority exists for invalidating the regulations and rulings concerning non-severe impairments. However, if it appears that the regulations conflict with the Social Security Act, the well established case law is contrary to defendants' contention.

The regulations are challenged as being facially in conflict with the Social Security Act because the finding of a non-severe impairment allows for a short circuit summary denial of benefits without making certain specific findings mandated by the statute. "It is clear that `regulations, in order to be valid must be consistent with the statute under which they are promulgated,' United States v. Larionoff, 431 U.S. 864, 873, 97...