Watters v. Harris, 79-2519

• Decision Date: 03 June 1980
• Docket Number: No. 79-2519,79-2519
• Citation: 656 F.2d 234
• Parties: Rena WATTERS, et al., Plaintiffs-Appellants, v. Patricia R. HARRIS, Secretary of Health, Education and Welfare, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 234

656 F.2d 234

Rena WATTERS, et al., Plaintiffs-Appellants, v. Patricia R. HARRIS, Secretary of Health, Education and Welfare, Defendant-Appellee.

No. 79-2519.

United States Court of Appeals Seventh Circuit.

Argued May 1, 1980.

Decided June 3, 1980. ^*

John M. Cannon, Chicago, Ill., for plaintiffs-appellants.

James Miles, Dept. of Health, Education and Welfare, Chicago, Ill., for defendant-appellee.

Before SWYGERT, PELL and CUDAHY, Circuit Judges.

CUDAHY, Circuit Judge.

The questions for decision are (1) whether Section 405(g) of the Social Security Act authorizes judicial review of the refusal by the Secretary of Health, Education and Welfare ¹ to extend the time period during which a hearing on a benefits claim may be requested and (2) whether Section 405(g) authorizes judicial review of the underlying claim for benefits.

I.

Title II of the Social Security Act (the "Act") provides survivors' benefits for claimants who demonstrate they had a specified relationship to an insured worker prior to the worker's death. 42 U.S.C. §§ 402, 416. The administrative process begins when an individual files a claim with the Social Security Administration ("Administration"). 20 C.F.R. §§ 404.905 404.907 (1979). If the claim is administratively denied, regulations permit administrative reconsideration. 20 C.F.R. §§ 404.909 404.915 (1979). Should a request for reconsideration prove unsuccessful, the claimant may request an evidentiary hearing before an administrative law judge ("ALJ"), 42 U.S.C. § 405(b); 20 C.F.R. §§ 404.917 404.918a (1979). A discretionary appeal from an adverse determination of the ALJ lies to the Appeals Council. 20 C.F.R. §§ 404.945 404.947 (1979).

The regulations and statute in effect during the time period relevant to this appeal required that a request for reconsideration of an initial determination be filed within six months after notice of the determination, 20 C.F.R. § 404.911 (1976); ² that a hearing before an ALJ be requested within six months after receipt of notice of the reconsideration decision, 42 U.S.C. § 405(b) (1974); 20 C.F.R. § 404.918 (1976); ³ and that Appeals Council review be requested within 60 days after issuance of the ALJ's decision or dismissal. 20 C.F.R. § 404.946 (1976). The regulations also provided that extension of these pertinent periods of limitation might be granted upon a showing of "good cause," 20 C.F.R. §§ 404.953 404.954 (1979), as defined in 20 C.F.R. § 404.954a (1979).

Judicial review of administrative proceedings must be sought in accordance with Section 405(g) of the Social Security Act, which provides:

Any individual after a final decision of the Secretary made after a hearing to which he was a party, ... may obtain review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision.... in ... (a) district court of the United States....

42 U.S.C. § 405(g) (emphasis supplied). Although a decision rendered on a claim at each stage of the administrative process is final and binding upon the parties, 20 C.F.R. §§ 404.908, 404.916, 404.940, 404.951 (1979), the regulations provide that judicial review may be sought only after the Appeals Council renders a decision upon review of an ALJ's decision or denies such review, thus defining an Appeals Council determination as the "final decision of the Secretary" for purposes of Section 405(g). 20 C.F.R. §§ 404.940, 404.951 (1979).

II.

On November 9, 1972, plaintiff-appellant Rena Watters of Evanston, Illinois, filed her initial claim with the Social Security Administration for survivor benefits for herself and for each of her three children. She alleged that when her husband, Samuel L. Watters, died in October 1972, he was a fully insured wage earner under the Act and that upon his death, she and the children became entitled to benefits. The Administration awarded Rena Watters insurance benefits for herself and for her children, effective October 1972. On December 13, 1973, Leola H. Watters of Anniston, Alabama, filed applications for survivors' benefits on behalf of herself and her four children, on the account of the same deceased wage earner, Samuel L. Watters. The Administration allowed only the application for the children and awarded Leola H. Watters benefits on behalf of her children.

On June 7, 1974, the Administration notified Rena Watters that the monthly benefits granted to her and her children would have to be reduced to permit allocation of benefits to the deceased wage earner's children by his subsequent marriage in Alabama. ⁴ Less than six months later, on October 17, 1974, Rena Watters requested reconsideration of the initial determination reducing her benefits. On June 5, 1975, the Administration issued a reconsidered determination affirming the reduction. The notice from the Administration advised Rena Watters that if she desired a hearing before an ALJ on her claim, she would have to make such a request within six months.

Almost two years later, on May 13, 1977, Rena Watters requested a hearing. ⁵ By order dated January 17, 1978, an ALJ denied her request for a hearing, finding that she had not shown "good cause" to extend the usual six-month deadline. The Appeals Council denied her request for review of the ALJ's decision, ⁶ informing her that his decision was correct and constituted the final determination of the Department of Health, Education and Welfare.

Plaintiff thereupon filed this action in the District Court for the Northern District of Illinois, resting jurisdiction on Section 405(g). The district court construed the complaint, which did not specifically indicate which administrative action plaintiff sought to contest, as a challenge to both the reduction of her family's benefits and to the refusal to find "good cause" to extend the deadline for seeking a hearing on the original reduction. The court dismissed the plaintiff's challenge to both actions on the ground it lacked subject matter jurisdiction under Section 405(g) to review either administrative ruling. It lacked jurisdiction over the June 1975 benefit reduction, the court stated, because the determination was not a "final decision of the Secretary made after a hearing," reflecting a failure on plaintiff's part to exhaust her administrative remedies. It similarly found that the March 1978 refusal to extend the time for requesting a hearing was not a "final decision of the Secretary made after a hearing," analogizing to the Supreme Court's ruling in Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977) (a refusal to reopen a prior decision of the Secretary was not a "final decision of the Secretary after a hearing" reviewable under Section 405(g)).

Subsequently, plaintiff moved the district court to alter the judgment by, inter alia, granting plaintiff leave to amend her complaint to add a constitutional claim that defendant's rejection of her assertion of "good cause" without a hearing constituted a denial of due process. The district court denied this request, noting not only plaintiff's tardiness in raising the constitutional issue, but also ruling that since the ALJ had examined the merits of plaintiff's reasons for seeking an extension, see note 5 supra, and had found they did not constitute "good cause," a hearing on the issue would have served no purpose. In any event, the district court added, whatever benefit a hearing might have served would have been outweighed by the administrative burden.

Plaintiff requested that the court reconsider this denial of her motion to alter the judgment, reasserting her due process claim. She argued that by denying her request for a hearing on the "good cause" issue, the Administration admitted the existence of "good cause." She argued that given this admission, the failure to reconsider the merits of her objection to the reduction in benefits was arbitrary and constituted a denial of due process. Once again, the court rejected plaintiff's motion, noting that even assuming "good cause" had been shown, the decision to grant the extension would have been discretionary with the ALJ or Appeals Council. On appeal, plaintiff seeks review of the district court's refusal to review the ALJ's failure to extend the limitations period and the underlying reduction determination.

III.

A.

As the district court noted, Sanders v. Califano, 430 U.S. 99, 108, 97 S.Ct. 980, 985, 51 L.Ed.2d 192 (1977), held that Section 405(g) does not authorize review of a refusal by the Secretary to reopen a previously adjudicated claim for benefits. ⁷ We agree with the district court that the analysis in Sanders as well as the reasoning in Ortego v. Weinberger, 516 F.2d 1005, 1007-08 (5th Cir. 1975), and Cappadora v. Celebreeze, 356 F.2d 1, 4 (2d Cir. 1966), cited by the Sanders court, compel a holding that refusals to extend administrative deadlines for requesting a hearing before an ALJ are not reviewable under Section 405(g). ⁸ See Bull v. Califano, (Jan. Dec. 1979 Transfer Binder) Unempl.Ins.Rep. (CCH) § 16,488 (N.D.N.Y.1979); Whitelock v. Califano, 451 F.Supp. 541 (E.D.Pa.1977). Cf. Sheehan v. Secretary of HEW, 593 F.2d 323 (8th Cir. 1979); Gilbert v. Califano, (Jan. Dec. 1979 Transfer Binder) Unempl.Ins.Rep. (CCH) § 16,219 (D.S.C.1978); Brown (Lorene) v. Mathews, (Jan. 1976 Jan. 1977 Transfer Binder) Unempl.Ins.Rep. (CCH) § 14,990 (W.D.Mo.1976).

Section 405(g) clearly limits judicial review to a particular type of agency action, a "final decision of the Secretary made after a hearing." As is true of a petition to reopen a prior decision, a request for an extension of time within which to request a hearing may be denied without a hearing. 42 U.S.C. § 405(b). Section 405(b) requires that the Administration hold a hearing in only one instance where an adverse ex parte determination on a claim for benefits has been made and timely request for a hearing on that claim has been filed. ⁹ The opportunity to request an extension...