Taylor v. Heckler, C-83-2047-WWS.

• Decision Date: 14 December 1983
• Docket Number: No. C-83-2047-WWS.,C-83-2047-WWS.
• Court: U.S. District Court — Northern District of California
• Parties: Mildred R. TAYLOR, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.

576 F. Supp. 1172

Mildred R. TAYLOR, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.

No. C-83-2047-WWS.

United States District Court, N.D. California.

December 14, 1983.

A. Keith Lesar, Aptos, Cal., for plaintiff.

John F. Barg, Asst. U.S. Atty., San Francisco, Cal., for defendant.

MEMORANDUM OF OPINION AND ORDER

SCHWARZER, District Judge.

This is an appeal from a final decision of the Secretary of Health and Human Services denying plaintiff Mildred Taylor disability benefits. 42 U.S.C. § 405(g) The case is before the Court on cross-motions for summary judgment.

Plaintiff filed an application for disability benefits on August 6, 1976, alleging that she had become disabled on May 30, 1974 due to a concussion and strain of the head and neck and a lower spine injury caused by an industrial accident. That claim was denied and notice of the denial was sent to plaintiff on December 16, 1976. Plaintiff did not appeal that denial.

Plaintiff filed the present application on May 8, 1981, alleging disability because of severe back pain. Plaintiff alleged the same causes of injury and date of onset of the disability as in her prior application. In connection with the present application plaintiff requested that her earlier application of August 1976 be reopened. 20 C.F.R. §§ 404.957, 404.958. Plaintiff's application was denied initially and upon reconsideration by the Secretary. Upon plaintiff's petition, a hearing was conducted before an administrative law judge (ALJ). The ALJ found that good cause existed to reopen the previous application and found that plaintiff was disabled since May 30, 1974.

The Appeals Council reviewed the ALJ's decision on its own motion, 20 C.F.R. §§ 404.969, 404.970(a)(3), and found that there was no basis to reopen the previous application and that plaintiff was not under a disability at any time through the date of the decision entitling her to disability insurance benefits. This appeal followed.

Plaintiff raises a number of issues on appeal.

First, she claims that the Appeals Council's initiation of review was improper and thus its decision should be set aside. The Appeals Council reviewed the ALJ's decision pursuant to 20 C.F.R. § 404.969 which provides that the Council may decide to review a decision on its own motion within 60 days after the date of the hearing or dismissal below. The Council notified plaintiff that, in deciding to review her case, it was applying § 404.970(a)(3) which provides that the "Appeals Council will review a case if ... the action, findings or conclusions of the administrative law judge are not supported by substantial evidence."

Plaintiff argues that the ALJ's decision was supported by substantial evidence and that the Council therefore had no authority to review and reverse it. Plaintiff would have this Court review the ALJ's decision and reinstate it as the final decision of the Secretary so long as it is supported by substantial evidence.

There is no authority within the Ninth Circuit and scant authority elsewhere for such a review by the district court. See Wood v. Schweiker, 537 F.Supp. 660, 667 (D.S.C.1982); Bohr v. Schweiker, 565 F.Supp. 610 (E.D.Pa.1983). In Bohr, supra, the court noted that courts are not precluded from inquiring into the propriety of review by the Appeals Council and that administrative agencies are bound by their own regulations. The court there failed to resolve the issue, however, and instead stated that "decisions of ... the Appeals Council which deny benefits are, nevertheless, always entitled to deference and must be affirmed so long as they are supported by substantial evidence." Id. at 612. The limited scope of judicial review under 42 U.S.C. § 405(b) requires this Court to affirm the Appeals Council's decision, as the final decision of the Secretary, if it is supported by substantial evidence.

Plaintiff argues that § 404.970(a)(3) allows the Appeals Council to initiate review only when it can be determined conclusively that the ALJ's decision was unsupported by substantial evidence. That section states that the Appeals Council will review a case (upon its own motion or upon petition by a claimant) under certain specified circumstances. Section 404.969 provides, however, that the Appeals Council may decide to review an action on its own motion. As noted by the court in Baker v. Heckler, 569 F.Supp. 749, 753 (W.D.Ark. 1983), "20 C.F.R. § 404.969 does not limit Appeals Council review to those situations enumerated in 20 C.F.R. § 404.970, nor does the latter section purport to be an exhaustive list of every circumstance in which Appeals Council `own motion' review would be appropriate.... A contrary holding would unduly interfere with the Secretary's authority to monitor the output of her department, and with her ability to determine when a final administrative decision has been reached." This construction is further supported by 42 U.S.C. § 405(b) which provides that "the Secretary is ... authorized, on her own motion, to hold such hearings and to conduct such investigations and other proceedings as she may deem necessary and proper for the administration of federal old-age, survivors, and disability insurance programs." Id. at 752-753. Consequently, this Court will not review the propriety of the Appeals Council's decision to review the ALJ's decision, but will restrict itself to determining whether the Appeals Council's contrary finding that plaintiff was not disabled is supported by substantial evidence.

Next, plaintiff argues that the Appeals Council's decision not to reopen plaintiff's previous claim is not supported by substantial evidence. However, the district court does not have subject matter jurisdiction to review a decision of the Secretary not to reopen a prior decision. Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977); Davis v. Schweiker, 665 F.2d 934 (9th Cir.1982). In Califano v. Sanders, the Supreme Court stated that § 405(g) authorizes judicial review only of a "final decision of the Secretary made after a hearing." It held that the opportunity to reopen final decisions, and any hearing convened to determine the propriety of such action, are afforded by the Secretary's regulations and not by the Social Security Act. Id. 430 U.S. at 108, 97 S.Ct. at 985. Once a decision becomes administratively final, the Secretary's decision to reopen the claim and to hold a hearing is purely discretionary. Thus, the Secretary's decision not to reopen a claim is not a "final" decision within the meaning of § 405(g). Id.; Davis, supra, 665 F.2d at 935. The Court further reasoned that allowing judicial review of a decision not to reopen a claim for benefits would frustrate the congressional purpose behind limiting the period to obtain judicial review to 60 days after the Secretary's final decision, which was intended to forestall repetitive and belated litigation of stale eligibility claims. Sanders, supra, 430 U.S. at 108, 97 S.Ct. at 985.

Plaintiff argues that Sanders should not bar jurisdiction in this case because the ALJ granted plaintiff's request to reopen the prior claim and then revised its decision on that claim in her favor. While this situation is different from that in Sanders and Davis, where the appeals were taken from determinations of the ALJ not to reopen a prior claim, the reasoning of Sanders still applies. The fact that here the ALJ's decision to reopen was incorporated into the final determination that plaintiff was disabled and entitled to benefits does not negate the fact that the ALJ nonetheless made a separable decision to reopen. The Appeals Council's reversal then became the Secretary's final decision on that issue which, under Sanders, cannot be reviewed by the district court.

Further, the fact that the ALJ held a hearing during which plaintiff could argue on behalf of her petition to reopen does not bring the matter within § 405(g), contrary to the holding of Sanders. The thrust of that decision was that, because the entire procedure of reopening, with or without a hearing, was discretionary, the decision of the Secretary was not "final" within the meaning of the statute. If the Court could find that a decision not to reopen which was made without a hearing would be immune from court review, then certainly such a decision made by the Appeals Council on the basis of additional evidence and testimony before the ALJ would also be unreviewable.

Finally, plaintiff argues that even if her 1976 claim is not reopened, there is no res judicata bar that prevents her from showing that she was disabled prior to that date for the purpose of supporting her new application for benefits commencing after 1976.

The final decision of the Secretary on December 16, 1976, established that plaintiff was not disabled as of that date. That decision is entitled to res judicata effect. Lyle v. Secretary of Health and Human Services, 700 F.2d 566, 568 (9th Cir.1983); Stuckey v. Weinberger, 488 F.2d 904, 909-911 (9th Cir.1973) res judicata applies to findings and decisions on the merits which become final as a result of a claimant's failure to seek review after notice of an adverse decision.

According to the court in Lyle, supra, the effect of this prior determination is not only to preclude benefits for disability prior to 1976, as plaintiff argues, but to create a presumption that plaintiff continued to be not disabled and capable of engaging in her prior work after that date. Lyle, supra, 700 F.2d at 568. The burden is on the plaintiff to overcome this presumption by providing evidence that conditions have changed since that date. Id.

Thus, once the Appeals Council determined not to reopen plaintiff's prior claim, the question before it was whether there was substantial evidence to show that plaintiff's condition had changed since December 1976, to rebut the presumption of non-disability which arose from the res judicata effect of the prior...