Wilson v. Sullivan

• Citation: 734 F. Supp. 157
• Decision Date: 30 March 1990
• Docket Number: Civ. A. No. 83-3771(SSB).
• Parties: John WILSON and Mary Christopher, on their own behalf and on behalf of others similarly situated, Plaintiffs, v. Hon. Louis W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant.
• Court: U.S. District Court — District of New Jersey

734 F. Supp. 157

John WILSON and Mary Christopher, on their own behalf and on behalf of others similarly situated, Plaintiffs, v. Hon. Louis W. SULLIVAN, M.D., Secretary of Health and Human Services, Defendant.^*

Civ. A. No. 83-3771(SSB).

United States District Court, D. New Jersey.

March 19, 1990.

Original Order Vacated and Amended Order Entered March 30, 1990.

Jan R. Evans, P.A. by Richard E. Yaskin, Medford, N.J., for plaintiffs.

Samuel A. Alito, Jr., U.S. Atty. by Peter G. O'Malley, Sp. Asst. U.S. Atty., Newark, N.J., (Barbara Lewis Spivak, Deputy Chief Counsel, Sandra M. Grossfeld, Asst. Regional Counsel, Dept. of Health and Human Services, Office of Gen. Counsel, New York Regional Office, New York City, of counsel), for defendant.

OPINION

BROTMAN, District Judge.

On March 29, 1989, this court entered an order to show cause why plaintiffs' complaint in this class action lawsuit should not be dismissed in light of the Supreme Court's recent decision in Bowen v. Yuckert, 482 U.S. 137, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987), which held that the Secretary's severity regulation, step two of his five-step sequential evaluation process for determining whether a disability claimant is disabled (hereinafter "step two"), was facially valid.¹ Plaintiffs challenge the validity of step two as applied to existing class members. Plaintiffs also argue that the size of the class should be increased to include all claimants denied under step two since 1976. Plaintiffs claim that the sixty day limitation on appealing an adverse decision of the Secretary should be equitably tolled because the Secretary conducted a clandestine policy to misapply step two. Additionally, plaintiffs request that the court order the Secretary to readjudicate all claims between December 1978 and August 20, 1980 that allege more than one impairment due to the Secretary's clandestine policy refusing to consider "not severe" impairments in combination during this period.

At this time, plaintiffs must show cause why the action should not be dismissed under Bowen v. Yuckert, 482 U.S. 137, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987). Also before the court is plaintiffs' motion for summary judgment and in the alternative to compel discovery. For the reasons stated herein, this court finds that plaintiffs are not entitled to further discovery at this late date. The court also concludes that plaintiffs are not entitled to summary judgment on their claims that the Secretary implemented a harsher standard than permitted by Yuckert as evidenced by the increased number of federal returns or as evidenced by the misapplication of twenty examples. The court does not reach the issue that these policies were clandestine.

The court finds, however, that plaintiffs are entitled to summary judgment on their claim that the Secretary used its illegal noncombination policy between 1978 and 1980 and that the policy was clandestine. The court will, therefore, order retroactive expansion of the class to include those claimants denied benefits as a result of this policy between December 1978 and August 20, 1980 who had not exhausted their administrative appeals or who still had opportunity to seek review in federal district court. Plaintiffs' motion for summary judgment, therefore, will be granted in part and denied in part. Likewise, the Secretary's motion for summary judgment will be granted in part and denied in part.

I. FACTS AND PROCEDURE

A. Procedural History of the Case

This case is the oldest case on the court's docket. Although adequately detailed in previous opinions, see Wilson v. Heckler, 622 F.Supp. 649 (D.N.J.1985), vacated on other grounds, 796 F.2d 36 (3d Cir.1986), vacated, 482 U.S. 923, 107 S.Ct. 3205, 96 L.Ed.2d 692, remanded, 829 F.2d 33 (3d Cir.1987), remanded, 709 F.Supp. 1351 (D.N.J.1989), its elaborate procedural history is set forth herein.

Representative plaintiff John Wilson filed this action in October 1983 to appeal the Secretary's denial of his application for disability benefits pursuant to the Supplemental Security Income ("SSI") and Old Age Survivor and Disability Insurance ("OASDI") programs. Mary Christopher, whose application for disability insurance and SSI the Secretary also denied, joined Wilson in this action. Together they sought leave of court to amend Wilson's complaint so they could seek class certification and injunctive relief. Plaintiffs claimed that they represented a class of disability applicants denied benefits by operation of step two of the Secretary's sequential evaluation process, 20 C.F.R. §§ 404.1520(c), 404.1521, 416.920(c), and 416.921 (1983). As representatives of a class, plaintiffs challenged the regulations as invalid and sought a preliminary injunction preventing the Secretary from applying step two in disability determinations for New Jersey claimants. After the plaintiffs filed their motions for class certification and injunctive relief, but before this court decided them, the Third Circuit invalidated one of the challenged regulations, 20 C.F.R. § 404.1520(c) (1985), as inconsistent with the Social Security Act ("the Act"), 42 U.S.C. § 423(d)(1)(A) (1982 & Supp. III 1985). Baeder v. Heckler, 768 F.2d 547 (3d Cir.1985).

In October 1985, the court granted plaintiffs leave to file the amended complaint and, shortly thereafter, the court granted the plaintiffs' motions for class certification and injunctive relief. Wilson v. Heckler, 622 F.Supp. 649 (D.N.J.1985), vacated on other grounds, 796 F.2d 36 (3d Cir. 1986), vacated, 107 S.Ct. 3205, remanded, 829 F.2d 33 (3d Cir.1987). The court found that the plaintiffs satisfied the numerosity, commonality, typicality, and adequacy of representation requirements of Fed.R. Civ.P. 23(a) as well as the requirements of Fed.R.Civ.P. 23(b)(2), therefore, it certified a class consisting of persons in New Jersey who have filed or will file applications for disability benefits under titles II and/or XVI of the Social Security Act and whose claims will be affected by step two of the Secretary's sequential evaluation process as set forth in 20 C.F.R. §§ 404.1520(c), 404.1521, 416.920(c), and 416.921 (1983), and in the Secretary's then-current interpretation of those regulations, Social Security Ruling ("SSR") 82-55 (1982). 622 F.Supp. at 662-62. The court's ruling limited the class to those claimants who applied for benefits after July 25, 1984, id. at 662, but left open the possibility of enlarging the class. Id. at 657-58.

Plaintiffs sought preliminary injunctive relief:

(1) prohibiting the Secretary from denying or terminating OASDI or SSI benefits due to the asserted non-severity of the claimant's impairments;

(2) directing the Secretary to initiate or restore payments of benefits to all members of the proposed class who:

(a) received decisions denying or terminating benefits that were rendered at any stage of the administrative process on or after July 26, 1984; or

(b) had pending challenges to such decisions on July 26, 1984; and

(3) directing the Secretary to reopen the applications of all class members whose applications for benefits have been denied at any stage of the administrative process since July 26, 1984 and to redetermine those applications without reference to 20 C.F.R. § 404.1520(c).

Id. at 654. Holding that the Secretary's interpretation of Baeder in a proffered new ruling, SSR 85-28, was "arbitrary and capricious for its patent disregard of Third Circuit precedent," id., and "represents a policy of constructive nonacquiescence," id. at 655, the court granted the requested relief. Id. In so holding, the court did not reach plaintiffs' claim that SSR 85-28 violated the notice and comment procedures of the Administrative Procedure Act ("APA"), 5 U.S.C. § 553(b) (1982). Id. at 654 n. 8.

The Secretary appealed to the Third Circuit. The appeals court upheld this court's preliminary injunction, refused to consider the court's class certification decision on jurisdictional grounds, and vacated in part this court's order because it could be read to include claimants not part of the class. The Secretary sought a writ of certiorari from the Supreme Court. While the Secretary's petition for certiorari was pending, the Supreme Court held in Bowen v. Yuckert, 482 U.S. 137, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987), that step two of the Secretary's sequential evaluation process does not contravene the Social Security Act. Yuckert directly undermined Baeder, on which this court premised its injunctive relief. The Supreme Court subsequently granted the Secretary's certiorari petition in this case and vacated the Third Circuit's decision, remanding the case for further consideration in light of Yuckert. Bowen v. Wilson, 482 U.S. 923, 107 S.Ct. 3205, 96 L.Ed.2d 692 (1987). In turn, the Third Circuit remanded the case to this court. Wilson v. Bowen, 829 F.2d 33 (3d Cir.1987).

Both representative plaintiffs' individual claims have been adjudicated. The Social Security Administration's ("SSA's") Appeals Counsel awarded benefits to Mary Christopher at some time after she and Wilson sought class certification but before the court passed on the motion. The court nonetheless found her to be a suitable class representative. Wilson, 622 F.Supp. at 650 n. 1. In addition, while the Secretary's petition for writ of certiorari was pending before the Supreme Court, this court granted plaintiff Wilson's motion for summary judgment in his individual case and ordered the Secretary to award benefits retroactive to May 26, 1982. The court's order stated that the decision in no way affected Wilson's status as a representative of the plaintiff class in this proceeding.

In March 1989, this court vacated the preliminary injunction of November 14, 1985, having concluded that Yuckert overturned Baeder v. Heckler, 826 F.2d 1345, 1346 (3d Cir.1987), upon which this court relied in issuing the injunction. The court denied the Secretary's motion to dismiss the suit as moot or unsuitable for...