Wilson v. Secretary of Health and Human Services

• Decision Date: 14 July 1986
• Docket Number: 86-5072,Nos. 85-5814,s. 85-5814
• Citation: 796 F.2d 36
• Parties: , Unempl.Ins.Rep. CCH 16,880 John WILSON and Mary Christopher, on their own behalf, and on behalf of others similarly situated v. SECRETARY OF HEALTH AND HUMAN SERVICES. Appeal of Margaret M. HECKLER, Sec. of Health and Human Services.
• Court: U.S. Court of Appeals — Third Circuit

Page 36

796 F.2d 36

14 Soc.Sec.Rep.Ser. 229, Unempl.Ins.Rep. CCH 16,880

John WILSON and Mary Christopher, on their own behalf, and on behalf of others similarly situated v. SECRETARY OF HEALTH AND HUMAN SERVICES Appeal of Margaret M. HECKLER, Sec. of Health and Human Services.

Nos. 85-5814, 86-5072.

United States Court of Appeals Third Circuit.

Argued June 17, 1986.

Decided July 14, 1986.

Richard E. Yaskin (argued), Jacobs & Schwalbe, P.C., Voorhees, N.J., for appellees.

Laurie J. Gentile (argued), Sp. Asst. U.S. Atty., Thomas W. Greelish, U.S. Atty., Mary Catherine Cuff, Asst. U.S. Atty., Chief, Civil Div., Newark, N.J., for appellant.

Before SEITZ, HUNTER, and MANSMANN, Circuit Judges.

JAMES HUNTER, III, Circuit Judge:

Appellees John Wilson and Mary Christopher originally brought this action in 1984 to appeal the decisions of the Secretary of Health and Human Services (the "Secretary") denying their applications for disability insurance benefits. Appellees subsequently amended their complaint to include class action allegations and requests for declaratory and injunctive relief against the Secretary. Specifically, they challenged the Secretary's policy of denying or terminating disability benefits solely because claimants' impairments are not medically "severe" and without consideration of claimants' age, education, work experience, residual functional capacity, or ability to return to their former work. Appellees then filed motions for preliminary injunctive relief and class certification. While these motions were pending before the district court, this court invalidated one of the Secretary's severity regulations, 20 C.F.R Sec. 404.1520(c) (1985), on the ground that it was inconsistent with the Social Security Act (the "Act"). See Baeder v. Heckler, 768 F.2d 547 (3d Cir.1985).

After we decided Baeder, the Secretary defended the motions pending in the district court by contending that a policy, set forth in Social Security Ruling ("SSR") 85-28, rendered 20 C.F.R. Sec. 404.1520(c) and the other severity regulations ¹ consistent with our holding in Baeder. The district court rejected this argument and granted appellees' motions for class certification and preliminary injunctive relief. The Secretary appeals the orders of the district court, invoking our jurisdiction under 28 U.S.C. Sec. 1292(a)(1) (1982). We will vacate in part the district court's order issuing the preliminary injunction and remand the matter to the district court.

I.

Before we discuss the merits of the district court's grant of the preliminary injunction, we initially confront the Secretary's assertion that the district court erred in certifying the class of plaintiffs. The class certified by the district court includes

[a]ll persons in the State of New Jersey who have filed or will file applications for disability benefits under Title II and/or Title XVI of the Social Security Act, as amended, and whose benefits have been or will be denied or terminated based upon a finding of no severe impairment pursuant to the policies set forth in 20 C.F.R. Secs. 404.1520(c) and .1521, 416.920(c) and .921 (1983), and Social Security Ruling 82-55 (1982).

Wilson v. Heckler, 622 F.Supp. 649, 661-62 (D.N.J.1985). In its order, the district court also stated:

The plaintiff class does not include, at this time, any such persons who received decisions of the Secretary on or before July 25, 1984 and who failed either to file a complaint in federal district court or to appeal to the next level of administrative review within 60 days after the date of receipt of such decision.

For purposes of determining class membership, the term "person in the State of New Jersey" is defined as an individual who was domiciled in the State of New Jersey at the time of his or her most recent administrative decision.

For purposes of determining whether disability was denied or terminated based on a finding of no severe impairment, the rationale of the final agency denial shall be controlling except that the rationale of the Administrative Law Judge shall be controlling where the Appeals Council denies review and has not initiated review on its own motion pursuant to 20 C.F.R. Sec. 404.969 (1983).

Wilson, 622 F.Supp. at 662.

The Secretary argues that the district court erred by including in the class claimants who have failed to exhaust administrative remedies. As explained below, we will not rule on this argument.

Our jurisdiction in this appeal is provided by 28 U.S.C. Sec. 1292(a)(1), which empowers this court to review district court orders "granting, continuing, modifying, refusing or dissolving injunctions." The district court's class certification ruling is pendent to the preliminary injunction order, which provides the basis for this appeal. In Kershner v. Mazurkiewicz, 670 F.2d 440 (3d Cir.1982) (in banc), this court held that "a pendent class certification order is not appealable under section 1292(a)(1) unless the preliminary injunction issue cannot properly be decided without reference to the class certification question." Id. at 449. The pendent class certification issue may be decided only when that issue "directly controls [the] disposition of the [preliminary injunction issue], or [when] the issues are, in some other way, inextricably bound." Id.; see Tustin v. Heckler, 749 F.2d 1055, 1065 (3d Cir.1984).

We believe that the class action and preliminary injunction issues are not sufficiently interrelated to provide us with jurisdiction to rule on the Secretary's class action contention. As appellees observe, each of the two issues are governed by different considerations. The preliminary injunction issue concerns whether the Secretary has authority to continue to apply the severity regulations in light of Baeder and SSR 85-28; the class certification issue, however, would be resolved by reference to principles of administrative finality.

Despite these differences, the Secretary maintains that the two issues may not be resolved separately because the district court premised its grant of a preliminary injunction on the status of the case as a class action. Specifically, the Secretary relies on the following statement by the district court:

In light of Baeder and of the new SSR, the court believes that plaintiffs would prevail on the merits with respect to the requested injunctive relief. Contrary to the Secretary's assertion, the Baeder opinion does not "obviate the need for injunctive relief." Defendant's Supplemental Memorandum at 16. The Baeder court did refuse to affirm the district court's "all-encompassing" injunction barring the Secretary from conducting any proceedings whatsoever using the severe impairment regulation. Baeder, supra, 768 F.2d at 550, 553. However, the Third Circuit noted that it did so because the district court did not have the authority to issue so broad an injunction in the context of an individual disability appeal. Id. In contrast, the instant action is appropriate for such relief since plaintiffs seek an injunction in the context of a motion to certify a broad class of disability applicants.

Wilson, 622 F.Supp. at 654. Nothing in this passage reveals that the presence of a subclass of claimants who had failed to exhaust their administrative remedies was determinative of the court's decision to issue the injunction. We also find no language in the remainder of the opinion demonstrating that the district court would have refused to allow the suit to proceed as a class action if the subclass were excluded. Thus, it appears that the specific class certification issue raised here was not necessarily a vital component of the district court's decision to issue the injunction. While we agree with the Secretary that the two issues are related, we do not deem them inextricably connected and therefore will rule on the preliminary injunction issue alone.

II.

In granting the appellees' motion for a preliminary injunction, the district court enjoined the Secretary "from denying or terminating Social Security Disability or Supplemental Security Income Benefits due to the policies set forth in 20 C.F.R. Secs. 404.1520(c) and .1521, 416.920(c) and .921 (1983), and Social Security Ruling 82-55." ² The district court also imposed timetables for, inter alia, identification and notification of class members, shipment of files to the New Jersey Division of Disability Determinations, and reconstruction of claims files. The Secretary not only claims that the district court erred in enjoining application of the severity regulations, but also complains that the timetables constitute improper judicial intrusion into the operation of the Department of Health and Human Services.

We may reverse a district court's order granting preliminary injunctive relief only upon finding that the district court abused its discretion or committed an error of law in issuing the requested relief. See, e.g., Kershner, 670 F.2d at 443; Continental Group, Inc. v. Amoco Chemicals Corp., 614 F.2d 351, 357 (3d Cir.1980). In pressing his first contention that the district court erred in enjoining the agency from applying the severity regulations, the Secretary maintains that the district court committed an error of law. Therefore, our standard of reviewing that contention is plenary. See Tustin, 749 F.2d at 1060.

The essence of this contention is that the district court erroneously concluded that SSR 85-28 was contrary to our Baeder decision. SSR 85-28 provides instructions for applying the second step of the evaluation process for determining entitlement to disability or supplemental security income benefits. ³ Under those instructions, the administrative adjudicator may apply the severity regulations, including 20 C.F.R. Sec. 404.1520(c), which was invalidated in Baeder. The Secretary justifies this policy by reading Baeder to provide that section 404.1520(c) is valid if applied only as a de minimus requirement that screens out applicants whose medical...