Stieberger v. Heckler, No. 84 CIV 1302 (LBS).

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtSAND
Citation615 F. Supp. 1315
PartiesTheresa STIEBERGER, individually and on behalf of other persons similarly situated; and the City of New York, Plaintiffs, v. Margaret M. HECKLER, Secretary, United States Department of Health and Human Services; Martha McSteen, Commissioner of the Social Security Administration; Louis B. Hays, Acting Director, Office of Programs and Policy, Social Security Administration; Frank V. Smith III, Associate Commissioner of Hearings and Appeals, Social Security Administration; and Paul Rosenthal, Chief Administrative Law Judge, Office of Hearings and Appeals, Social Security Administration, Defendants.
Decision Date19 August 1985
Docket NumberNo. 84 CIV 1302 (LBS).

615 F. Supp. 1315

Theresa STIEBERGER, individually and on behalf of other persons similarly situated; and the City of New York, Plaintiffs,
v.
Margaret M. HECKLER, Secretary, United States Department of Health and Human Services; Martha McSteen, Commissioner of the Social Security Administration; Louis B. Hays, Acting Director, Office of Programs and Policy, Social Security Administration; Frank V. Smith III, Associate Commissioner of Hearings and Appeals, Social Security Administration; and Paul Rosenthal, Chief Administrative Law Judge, Office of Hearings and Appeals, Social Security Administration, Defendants.

No. 84 CIV 1302 (LBS).

United States District Court, S.D. New York.

August 19, 1985.


615 F. Supp. 1316
COPYRIGHT MATERIAL OMITTED
615 F. Supp. 1317
COPYRIGHT MATERIAL OMITTED
615 F. Supp. 1318
COPYRIGHT MATERIAL OMITTED
615 F. Supp. 1319
M.F.Y. Legal Services, Inc., New York City (Carolyn A. Kubitschek, Ralph Bird, New York City, of counsel), American Civil Liberties Union Foundation, New York City (Burt Neuborne, Carl Loewenson, Jr.,
615 F. Supp. 1320
New York City, of counsel), for individual plaintiffs and class representatives

Frederick A.O. Schwarz, Jr., Corp. Counsel of City of New York, New York City (Mary McCorry, Asst. Corp. Counsel, New York City, of counsel), for City of New York.

Richard K. Willard, Acting Asst. Atty. Gen., Civ. Div., Dept. of Justice, Washington, D.C. (Brook Hedge, Lewis K. Wise, Brian G. Kennedy, Robert S. Lavet, Washington, D.C., of counsel), Terry Coleman Acting Gen. Counsel, Dept. of Health and Human Services, Washington, D.C. (Donald Gonya, Washington, D.C., of counsel), Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., New York City (Frederick M. Lawrence, Asst. U.S. Atty., Mark S. Sochaczewsky, Sp. Asst. U.S. Atty., New York City, of counsel), for defendants.

 TABLE OF CONTENTS
                I. INTRODUCTION 1321
                II. FACTS 1323
                III. MOTIONS CONCERNING INDIVIDUAL NAMED PLAINTIFFS 1325
                 A. Defendants' Motion to Remand (Stieberger) 1325
                 B. Motions to Intervene (Happy, Vega) 1326
                 C. Motions to Consolidate (Sullivan, Johnson) 1326
                IV. CLASS CERTIFICATION 1327
                V. JURISDICTIONAL ISSUES 1328
                 A. Social Security Act Jurisdiction: Section 405(g) 1328
                 1. Presentment 1329
                 2. Exhaustion 1329
                 3. Sixty Day Limitation 1330
                 B. Mandamus Jurisdiction: Section 1361 1334
                 C. Standing of City of New York 1337
                VI. PRELIMINARY INJUNCTION 1340
                 A. The Standard 1340
                 B. Irreparable Harm 1341
                 C. Likelihood of Success on the Merits 1342
                 1. Non-Acquiescence 1342
                 a. Non-Acquiescence in Second Circuit Precedent 1343
                 b. Congressional Ratification of Defendants' Treating Physician
                 Rule 1349
                 c. The Legality of Non-Acquiescence 1350
                 (i) The Original Non-Acquiescence Policy 1351
                 (ii) Interim Circular No. 185 1367
                 d. Propriety of Injunctive Relief 1375
                 2. Bellmon Review 1376
                 a. Introduction 1376
                 b. Legal Issues 1379
                 (i) Standing 1380
                 (ii) Mootness 1381
                 (iii) Waiver 1381
                 (iv) The Legality of Bellmon Review 1386
                 (a) The Bellmon Amendment 1388
                 (b) Justification for Agency Focus on Allowance Decisions 1390
                 (c) Evidence of Bellmon Review's Impact on ALJ Impartiality 1393
                 3. Conclusion 1398
                VII. RELIEF 1399
                

615 F. Supp. 1321
APPENDIX A. Order B. Papers Filed by Parties in Connection with Motions C. Interim Circular No. 185

OPINION

SAND, District Judge.

I. INTRODUCTION

Plaintiffs, Theresa Stieberger and the City of New York, have instituted this action to challenge two policies of the United States Department of Health and Human Services ("HHS") and the Social Security Administration ("SSA"), as implemented by the abovenamed defendants.1 Plaintiffs challenge: (1) the "non-acquiescence" policy, under which Administrative Law Judges ("ALJs") have been instructed to disregard the decisions of federal courts within the circuit in which they sit when those decisions conflict with the Secretary's own policies; and (2) the "Bellmon Review" policy, under which, inter alia, the decisions of ALJs with a high percentage of pro-claimant determinations in disability benefit cases were subject to agency-initiated review by the agency's Appeals Council.

Plaintiffs contend that the non-acquiescence policy has deprived them of access to impartial and decisionally independent ALJs and has unlawfully discriminated between those claimants who are able to secure judicial review and those who do not have access to judicial review in violation of the Administrative Procedure Act ("APA"), the Social Security Act, the Due Process Clause of the Fifth Amendment to the United States Constitution, and the principle of separation of powers. Plaintiffs contend that the Bellmon Review policy has deprived them of access to impartial and decisionally independent ALJs in violation of the APA, the Social Security Act, and the Due Process Clause of the Fifth Amendment to the United States Constitution and has unlawfully discriminated against disability benefits claimants in violation of the Due Process Clause of the Fifth Amendment2 by subjecting ALJ decisions to Bellmon Review because such decisions are unfavorable to the government. Plaintiffs seek declaratory and injunctive relief pursuant to 28 U.S.C. §§ 2201 and 2202.

Six motions are presently pending before this Court. Plaintiffs' four motions were filed on October 23, 1984. First, Patricia Happy and Angel Vega have moved pursuant to F.R.Civ.P. 24 to intervene. Second, Milagros Sullivan and Harold Johnson have moved pursuant to F.R.Civ.P. 42 to have their cases consolidated with the above-captioned action. Third, plaintiffs3 have moved pursuant to F.R.Civ.P. 23 to certify this action as a class action. Fourth, plaintiffs have moved pursuant to F.R.Civ.P. 65 for a preliminary injunction (1) enjoining defendants from continuing their Bellmon Review and non-acquiescence policies, (2) notifying agency employees and their agents who adjudicate disability claims in New York that they are to decide cases in accordance with the precedents of the United States Court of Appeals for the Second

615 F. Supp. 1322
Circuit, (3) an order granting the individual named plaintiffs interim benefits pending final judgment;4 and (4) ordering defendants to (a) identify class members, (b) notify them that their denial or termination of benefits may have been wrongful,5 and (c) develop a procedure for claimants to renew their claims.6

On October 4, 1984, defendants moved pursuant to 42 U.S.C. § 405(g) to remand plaintiff Stieberger's case to the Secretary. Defendants subsequently moved on February 4, 1985 to dismiss pursuant to F.R. Civ.P. 12(b)(1) and (6) or alternatively for summary judgment pursuant to F.R.Civ.P. 56. Defendants' motion to dismiss or for summary judgment seeks to dismiss the Bellmon Review claim in its entirety based on lack of standing, mootness, waiver, and on the merits, and seeks to dismiss the non-acquiescence claim on mootness grounds based on alleged congressional ratification of the Secretary's policy for evaluating the opinion of a claimant's treating physician. See Defendants' Memorandum of Law (i) In Support of Motion to Dismiss, etc., at 2, 12-24.7

On February 4, 1985, oral argument was held on the aforementioned motions. At that time, the Court directed counsel for defendants to secure a review of the SSA's non-acquiescence policy by officials at the highest levels of HHS and to submit a supplemental memorandum concerning the legal issues raised by the policy. See Transcript of Oral Argument ("Tr. I") 52, 58, 64. After a review of the policy by the Undersecretary of HHS, the Acting Commissioner of Social Security and the Acting General Counsel of HHS, defendants filed their Memorandum Concerning Instruction to Administrative Law Judges on March 4, 1985. The Court also requested plaintiffs to address the issue of the scope of the proposed class and to give consideration to whether the proposed class definition could be narrowed so as to exclude claimants whose claims were denied for reasons unrelated to the issues in this case. Tr. I 22-23.

By order dated March 8, 1985, plaintiffs' class certification and preliminary injunction motions were referred to Magistrate Naomi Reice Buchwald for report and recommendation. After conducting an oral argument on April 1, 1985, see Transcript of Oral Argument ("Tr. II"), the Magistrate issued her report and recommendation on May 8, 1985. The Magistrate recommended that plaintiffs' motion for class certification be granted and that plaintiffs' motion for preliminary injunctive relief enjoining defendants from continued implementation of the Bellmon Review and non-acquiescence policies be granted as well. The Magistrate also recommended that defendants be ordered to identify with reasonable promptness all members of the class.

On June 3, 1985, defendants filed objections to virtually all of the Magistrate's Report.8 Plaintiffs filed responsive papers on June 21, 1985, in which they essentially objected to that portion of the Magistrate's Report concerning defendants' alleged nonacquiescence

615 F. Supp. 1323
in Second Circuit predecent concerning the evaluation of a claimant's complaints of pain. Defendants filed a supplemental memorandum on July 15, 1985 concerning recent developments in two cases which are relevant to this action and a reply memorandum on July 16, 1985 in response to plaintiffs' responsive papers. Pursuant to 28 U.S.C. § 636, we have reviewed de novo those portions of the Report to which objection has been made.9

For the reasons set forth below, (1) Patricia Happy's motion to intervene is granted and Angel Vega's motion to intervene is dismissed as moot; (2) the motion to consolidate the cases of Milagros Sullivan and Harold Johnson with this action is granted; (3) the motion to certify this action as a class action is granted as set forth in the Order issued in conjunction with this Opinion (Appendix A); (4) the motion to enjoin the defendants' current non-acquiescence policy is granted...

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41 practice notes
  • Moss v. Clark, Civ. A. No. 88-0361-AM.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • 21 Octubre 1988
    ...(plaintiff likely to succeed on merits in challenge to city zoning requirements—preliminary injunction issued); Stieberger v. Heckler, 615 F.Supp. 1315 (S.D.N.Y. 1985) (plaintiff likely to succeed on merits in challenge to Secretary of Health and Human Services non-acquiescence policy — pre......
  • Grant v. Shalala, No. 91-5675
    • United States
    • U.S. Court of Appeals — Third Circuit
    • 7 Abril 1993
    ...inadmissible under rules of evidence applicable to court procedure. 9 For a description of this program, see Stieberger v. Heckler, 615 F.Supp. 1315, 1377-79 (S.D.N.Y.1985), vacated on other grounds, 801 F.2d 29 (2d Cir.1986); Association of Administrative Law Judges, Inc. v. Heckler, 594 F......
  • Nat'l Org of Veterans Adv v. Secretary of Veterans Affairs
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • 16 Agosto 2001
    ...Coll. v. N.L.R.B., 623 F.2d 224 (2d Cir.), cert. denied, 449 U.S. 975, 66 L. Ed. 2d 237, 101 S. Ct. 386 (1980); Stieberger v. Heckler, 615 F. Supp. 1315 (S.D.N.Y. 1985), vacated, 801 F.2d 29 (2d Cir. 1986). 9. In Century Steel Erectors, Inc. v. Dole, 281 U.S. App. D.C. 202, 888 F.2d 1399 (D......
  • Ayuda, Inc. v. Thornburgh, No. 88-5226
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 18 Julio 1989
    ...Gen. Hosp. v. NLRB, 608 F.2d 965, 970 (3d Cir.1979), and even suggested that it might be unconstitutional, Stieberger v. Heckler, 615 F.Supp. 1315, 1363 (S.D.N.Y.1985), vacated on other grounds sub. nom. Stieberger v. Bowen, 801 F.2d 29 (2d Cir.1986), we have never decided the issue. Compar......
  • Request a trial to view additional results
41 cases
  • Moss v. Clark, Civ. A. No. 88-0361-AM.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • 21 Octubre 1988
    ...(plaintiff likely to succeed on merits in challenge to city zoning requirements—preliminary injunction issued); Stieberger v. Heckler, 615 F.Supp. 1315 (S.D.N.Y. 1985) (plaintiff likely to succeed on merits in challenge to Secretary of Health and Human Services non-acquiescence policy — pre......
  • Tataranowicz v. Sullivan, No. 91-5052
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 1 Junio 1992
    ...Cir.1986), vacated on other grounds sub nom. Bowen v. Dixon, 482 U.S. 922, 107 S.Ct. 3203, 96 L.Ed.2d 690 (1987); Stieberger v. Heckler, 615 F.Supp. 1315, 1329 (S.D.N.Y.1985). As the court pointed out in Dixon, this result is consistent with the Page 273 [294 U.S.App.D.C. 327] practice of d......
  • Johnson v. U.S. R.R. Retirement Bd., Nos. 90-1243
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 11 Septiembre 1992
    ...S.Ct. 1401, 3 L.Ed.2d 5 (1958), and Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803). See, e.g., Stieberger v. Heckler, 615 F.Supp. 1315, 1356-58 (S.D.N.Y.1985), prelim. inj. vacated sub nom. Stieberger v. Bowen, 801 F.2d 29 (2d Cir.1986); Lopez, 725 F.2d at 1497 n. 5. But ......
  • Oulton v. Bowen, No. CIV-87-1238C.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Western District of New York
    • 18 Febrero 1988
    ...Cf., Mississippi Medicaid Com'n v. U.S. Dept. of Health, 633 F.Supp. 78, 82-86 (S.D.Miss.1985). 9 See also Stieberger v. Heckler, 615 F.Supp. 1315, 1329-30 (S.D.N.Y.1985); State of New York v. Heckler, 105 F.R.D. 118, 112-23 (S.D.N. Y.1985); Fox v. Bowen, 656 F.Supp. 1236 10 Item 33, pp. 17......
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