Wilson v. Berryhill

• Decision Date: 14 May 2019
• Docket Number: CIVIL ACTION No. 18-4862
• Citation: 379 F.Supp.3d 381
• Parties: Lynnara WILSON, Plaintiff, v. Nancy BERRYHILL, Acting Commissioner, Social Security Administration, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

379 F.Supp.3d 381

Lynnara WILSON, Plaintiff,

v.Nancy BERRYHILL, Acting Commissioner, Social Security Administration, Defendant.

CIVIL ACTION No. 18-4862

United States District Court, E.D. Pennsylvania.

Signed May 14, 2019

Filed May 15, 2019

Claire Grandison, Community Legal Services, Philadelphia, PA, for Plaintiff.

M. Jared Littman, Michelle Scotese, SSA Office of General Counsel, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION

Timothy R. Rice, U.S. Magistrate Judge

The notion that claims of legal error must be preserved at trial for appellate review is a bedrock tenet of our legal system. See, e.g., Judiciary Act § 25, 1 Stat 86 ("no other error shall be assigned or regarded as a ground of reversal ... than such as appears on the face of the record"); Crowell v. Randell, 35 U.S. 368, 391, 10 Pet. 368, 9 L.Ed. 458 (1836) (if it does not appear on the record that an issue has been raised and decided in the lower court, "appellate jurisdiction fails"). Not only does it afford the presiding jurist an opportunity to prevent error, it arms a reviewing court with a full evidentiary and legal record to resolve appellate challenges. See Hormel v. Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 85 L.Ed. 1037 (1941) (it is "essential" for litigants to have an opportunity to offer all relevant evidence at the trial level); see also Fed. R. Evid. 103(a), Adv. Comm. Notes (discussing the requirements for claiming legal error with respect to an admission or exclusion of evidence). The justification for a timely challenge loses force, however, when raising such a claim would be futile and not achieve the intended goal of getting things right in the first place.

This case presents such a dilemma.

Petitioner Lynnara Wilson for the first time contends the presiding administrative law judge ("ALJ") was improperly appointed and therefore lacked legal authority to decide her case. See Pl. Br. (doc. 14-1) at 2–6 (citing Lucia v. S.E.C., ––– U.S. ––––, 138 S.Ct. 2044, 2055, 201 L.Ed.2d 464 (2018) (holding ALJs employed by the Securities and Exchange Commission ("SEC") were inferior officers subject to appointment pursuant to the Appointments Clause of the United States Constitution)). She concedes she failed to present her claim for error before the ALJ, which has prompted the Commissioner to seek summary denial of the Lucia claim because it was not timely raised and is nonjurisdictional. See Def. Resp. (doc. 17) at 5–15 (citing Lucia, 138 S.Ct. at 2045 ("one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case is entitled to relief") (internal quotation marks and citation omitted)).

Although Wilson's Appointments Clause objection is nonjurisdictional, her claim merits consideration even though not raised below because it impacts the validity of the underlying proceeding, especially in the unique inquisitorial context of Social Security Administration ("SSA") proceedings. Further, Wilson raised her objection at the earliest possible opportunity after Lucia was decided, and was not required to preserve her Lucia claim by raising it at the initial administrative level of review. In any event, it would have been futile for Wilson to raise her claim before the ALJ because the ALJ was powerless to resolve it.¹

Wilson's case is remanded to a different, constitutionally appointed ALJ. Since the ALJ's decision was a nullity based on Lucia, I need not address the merits of her additional claims because a new ALJ must conduct a de novo review on remand.²

I. Background

Wilson received Supplemental Security Income ("SSI") during her childhood because of a learning disability. R. at 115–18, 138. When she turned eighteen, she was found no longer disabled. Id. Wilson appealed, and following several hearings, an SSA ALJ denied her claim. Id. at 11. Applying the five-step sequential analysis, see 20 C.F.R. § 416.920(a)(4)(i)–(v), the ALJ found Wilson was no longer disabled because she could perform jobs available in the national economy, R. at 23–24.

The Appeals Council denied Wilson's request for review, id. at 1–6, and Wilson filed this case,³ Compl. (doc. 2).

II. The ALJ's Authority to Decide the Case

Lucia

In 2012, an SEC ALJ found Lucia had violated certain securities laws. Lucia, 138 S.Ct. at 2049. On appeal to the SEC, Lucia argued the ALJ was not properly appointed under the Appointments Clause because the ALJ was appointed by SEC staff members rather than the SEC. Id.; see also U.S. Const., art. II, § 2, cl. 2 (inferior officers must be appointed by "the President," "Courts of Law," or "Heads of Departments"); Buckley v. Valeo, 424 U.S. 1, 126, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam ) (inferior officers are those individuals who "exercise significant authority pursuant to the laws of the United States").

After both the SEC and the United States Court of Appeals for the D.C. Circuit rejected Lucia's argument, the Supreme Court reversed, holding that SEC ALJs are inferior officers subject to the Appointments Clause.⁴ Lucia, 138 S.Ct. at 2049, 2055. The Court also held Lucia's argument was "timely" because it had been raised "before the Commission[ ] and ... in the Court of Appeals and [the Supreme] Court." Id. (internal quotation marks and citation omitted). The Court concluded Lucia was entitled to a new hearing before a different, constitutionally appointed ALJ. Id.

Although Lucia decided the constitutional status of only SEC ALJs, the decision implicated the status of ALJs in other agencies, including the more than 1,600 ALJs at the SSA. See Br. of Nat'l Org. of Soc. Sec. Claimants' Reps., Lucia v. S.E.C., 138 S.Ct. 2044 (No. 17-130) (April 2, 2018), at *1–2 ; see also Bandimere v. S.E.C., 844 F.3d 1168, 1200 (10th Cir. 2016), cert. denied sub nom, ––– U.S. ––––, 138 S.Ct. 2706, 201 L.Ed.2d 1101 (2018) (McKay, J., dissenting) (stating there is no "meaningful difference between SEC ALJs and SSA ALJs under the majority's [decision]"). Unlike the SEC which features an adversarial system, however, SSA ALJs differ in significant respects.

Unique Nature of SSA Disability Claims Process

SSA ALJs oversee hearings to determine a claimant's eligibility for benefits. 42 U.S.C. § 405(b)(1). If the claimant receives an unfavorable decision from the ALJ, he may request review by the Appeals Council, 20 C.F.R. § 422.205(a), followed by review in United States District Court, 42 U.S.C. § 405(g).

Although all ALJs preside over hearings, "[t]he differences between courts and agencies are nowhere more pronounced than in [SSA] proceedings."

Sims v. Apfel, 530 U.S. 103, 110, 120 S.Ct. 2080, 147 L.Ed.2d 80 (2000). In other agencies, such as the SEC, litigants are required to present issues and arguments. See id. at 109–10, 120 S.Ct. 2080. In the Social Security context, however, the ALJ must investigate the facts and develop the record, considering "arguments both for and against granting benefits." Id. at 111, 120 S.Ct. 2080 (citation omitted); Richardson v. Perales, 402 U.S. 389, 410, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971) ("[The ALJ] acts as an examiner charged with developing the facts."); see also 20 C.F.R. § 404.944. This distinction renders hearings before SSA ALJs "inquisitorial rather than adversarial." Sims, 530 U.S. at 110–11, 120 S.Ct. 2080 ; see also id. at 111–12, 120 S.Ct. 2080 (citing SSA regulations illustrating non-adversarial nature of proceedings); 20 C.F.R. § 404.900(b) ("In making a determination or decision in your case, we conduct the administrative review process in an informal, non-adversarial manner."). "Given that a large portion of [SSA] claimants ... have no representation," it makes good sense to employ such a model. Sims, 530 U.S. at 112, 120 S.Ct. 2080.

Until recently, SSA ALJs were appointed from a pool of applicants maintained by the Office of Personnel Management ("OPM"). See Menoken v. McGettigan, 273 F Supp.3d 188, 192 (2017) ("OPM has exclusive control over the process used to refer applicants to be considered for ALJ positions."). Following Lucia, the President signed an Executive Order on July 10, 2018, directing that ALJs thereafter be hired by individual agencies, rather than from the OPM's central pool. Exec. Order No. 13,843, 83 Fed. Reg. 32755 (July 10, 2018). That Order changed the appointment process of ALJs prospectively, but did not affect the status of previously appointed ALJs. See id. "On July 16, 2018, the Acting Commissioner ratified the appointment of ALJs ... to address any Appointments Clause questions involving SSA claims."⁵ Soc. Sec. Admin., EM-180003 REV 2, Important Information Regarding Possible Challenges to the Appointment of Administrative Law Judges in SSA's Administrative Process—UPDATE (2/6/2018).

Before Lucia, and while Wilson was litigating her claims administratively, the Department of Justice ("DOJ") had argued that ALJs were mere employees, not inferior officers subject to constitutional appointment.⁶ See, e.g., Br. for Resp., Lucia v. S.E.C., 832 F.3d 277 (D.C. Cir. 2016) (No. 15-1345), 2017 WL 1196122, at *1 ("the [ALJs] employed by the [SEC] are employees of the Commission, not ‘inferior Officers’ "); see also Muhammad, No. 18-172, N.T. 10/16/18 at 6–8. While litigating Lucia in the Supreme Court, however, the DOJ changed its position, conceding that ALJs were inferior officers. See Reply Br. for Resp. Supporting Pets., Lucia v. S.E.C., 138 S.Ct. 2044 (2018) (No. 17-130), 2018 WL 1806836, at *1 ; see also Memo. from the Sol. Gen. to Agency Gen. Counsels at 3 ("[The DOJ] no longer plans to argue that such ALJs are employees rather than inferior officers.").

Application of Lucia to SSA Proceedings

The Commissioner concedes that SSA ALJs are inferior officers who must be appointed pursuant to the Appointments Clause. See Def. Resp. at 5 n.1 ("For purposes of this brief, Defendant does not argue that SSA ALJs are employees rather than inferior officers."); SSR 19-1p, 2019 WL 1202036, at *9583 (Mar. 15, 2019) ...