[Federal Register Volume 60, Number 116 (Friday, June 16, 1995)]
[Notices]
[Pages 31753-31756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14775]



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SOCIAL SECURITY ADMINISTRATION
[Social Security Ruling SSR 95-2c]


Disability--Authority of Appeals Council to Dismiss a Request for 
Hearing for a Reason for Which the Administrative Law Judge Could Have 
Dismissed the Request--Res Judicata

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Ruling.

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SUMMARY: In accordance with 20 CFR 422.406(b)(1), the Commissioner of 
Social Security gives notice of Social Security Ruling 95-2c. This 
Ruling is based on the decision of the U.S. Court of Appeals for the 
Sixth Circuit in Harper v. Secretary of Health and Human Services, 
which upheld the authority of the Appeals Council to dismiss a request 
for hearing for a reason the Administrative Law Judge (ALJ) could have 
dismissed it, even though the ALJ held a hearing and issued a decision 
on the merits.
    This Ruling reconfirms the Appeals Council's authority to dismiss a 
request for hearing on the basis of administrative res judicata.

EFFECTIVE DATE: June 16, 1995.

FOR FURTHER INFORMATION CONTACT: Joanne K. Castello, Division of 
Regulations and Rulings, Social Security Administration, 6401 Security 
Boulevard, Baltimore, MD 21235, (410) 965-1711.

SUPPLEMENTARY INFORMATION: Although we are not required to do so 
pursuant to 5 U.S.C. 552 (a)(1) and (a)(2), we are publishing this 
Social Security Ruling in accordance with 20 CFR 422.406(b)(1).
    Social Security Rulings make available to the public precedential 
decisions relating to the Federal old-age, survivors, disability, 
supplemental security income, and black lung benefits programs. Social 
Security Rulings may be based on case decisions made at all 
administrative levels of adjudication, Federal court decisions, 
Commissioner's decisions, opinions of the Office of the General 
Counsel, and other policy interpretations of the law and regulations.
    Although Social Security Rulings do not have the force and effect 
of the law or regulations, they are binding on all components of the 
Social Security Administration, in accordance with 20 CFR 
422.406(b)(1), and are to be relied upon as precedents in adjudicating 
other cases.
    If this Social Security Ruling is later superseded, modified, or 
rescinded, we will publish a notice in the Federal Register to that 
effect.

(Catalog of Federal Domestic Assistance, Program Nos. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security-- Retirement 
Insurance; 96.004, Social Security--Survivors Insurance; 96.005, 
Special Benefits for Disabled Coal Miners; 96.006, Supplemental 
Security Income.)

    Dated: June 6, 1995.
Shirley S. Chater,
Commissioner of Social Security.

    Sections 205(b) and 221(d) of the Social Security Act (42 U.S.C. 
405(b) and 421(d)) Disability--Authority of Appeals Council to dismiss 
a request for hearing for a reason for which the administrative law 
judge could have dismissed the request--res judicata.
20 CFR 404.957(c)(1)
Harper v. Secretary of Health and Human Services, 978 F.2d 260 (6th 
Cir. 1992)
    The claimant, who stopped working in January 1981, filed 
applications for 

[[Page 31754]]
disability insurance benefits in 1981, 1982, and 1986. The Social 
Security Administration (SSA) denied all of these applications. In May 
1987, she filed a fourth application. SSA denied this application 
initially and upon reconsideration, and the claimant did not request 
further administrative review. In June 1988, the claimant filed a fifth 
application which was denied initially and upon reconsideration. The 
claimant requested and received a hearing before an Administrative Law 
Judge (ALJ). The ALJ issued a decision denying her application, finding 
that she was not disabled through December 31, 1986, the date on which 
her insured status expired. The claimant filed a request for Appeals 
Council review. The Appeals Council granted the request, vacated the 
ALJ's decision, and dismissed the request for hearing on the basis of 
administrative res judicata.
    The Appeals Council concluded that under the doctrine of 
administrative res judicata, 20 CFR 404.957(c)(1), the determination 
denying the claimant's fourth application was dispositive of her 
subsequent claim.
    The claimant then filed a civil action. The district court remanded 
the case to the Secretary to determine whether the determination on the 
claimant's fourth application should have been reopened pursuant to 20 
CFR 404.988(a). The Appeals Council found no basis for reopening that 
determination, and again determined that the request for hearing on the 
fifth application should be dismissed on the basis of res judicata. The 
case was returned to the district court which upheld the action of the 
Appeals Council. The claimant then appealed to the United States Court 
of Appeals for the Sixth Circuit. In her appeal, the claimant 
maintained that the ALJ's decision to hold a hearing and issue a 
decision on the merits was not subject to review by the Appeals 
Council. She further argued that even if the ALJ erred in holding the 
hearing, the Appeals Council could not dismiss the request for hearing 
on the basis of res judicata after the ALJ heard the case on the 
merits.

    The Court of Appeals stated that the ALJ's action in holding a 
hearing and issuing a decision appeared to be erroneous and that it 
knew of no reason why it was not within the province of the Appeals 
Council to correct the error. The court held that the Appeals 
Council has authority to vacate an ALJ's decision and dismiss the 
request for hearing on res judicata grounds even though the ALJ held 
a hearing and issued a decision on the merits.

Per Curium

    This is a social security case in which the appellant filed a 
series of claims asserting that she had become disabled before her 
insured status expired. The main question before us is whether, after 
an administrative law judge has conducted an evidentiary hearing 
despite the existence of an earlier final decision denying the same 
claim, the Appeals Council can deny the hearing request retroactively, 
thereby foreclosing judicial review. The district court answered this 
question in the affirmative and dismissed the claimant's case. We agree 
with the district court's decision, and we shall affirm the dismissal.

I

    The claimant, Edith Harper, held a job for a ten-year period ending 
in January of 1981. She has not worked since that time, and her insured 
status expired on December 31, 1986.
    Ms. Harper filed applications for disability insurance benefits on 
April 7, 1981, February 8, 1982, April 22, 1986, May 19, 1987, and June 
23, 1988. The first, third, and fourth applications were denied 
initially and upon reconsideration. The second was denied initially, 
and no appeal was taken from its denial. Ms. Harper did not request a 
hearing before an administrative law judge with respect to any of the 
first four applications.
    After the denial upon reconsideration of her fifth claim, Ms. 
Harper sought and was granted a hearing before an administrative law 
judge. The ALJ denied the fifth claim on its merits, finding that Ms. 
Harper had not been disabled as of the last date on which she was 
insured. Ms. Harper sought review by the Appeals Council, which granted 
review in a letter dated March 12, 1990. In the same letter, the 
council alerted Ms. Harper to the possibility that her claim would be 
disposed of on administrative res judicata grounds.
    On May 25, 1990, the Appeals Council vacated the decision of the 
ALJ and retroactively denied the request pursuant to which the ALJ had 
conducted the hearing. The council took the position that under the 
doctrine of administrative res judicata, the denial of Ms. Harper's 
fourth claim was dispositive of any subsequent claim.
    Following initiation of the present suit for judicial review, the 
district court remanded the matter to the Appeals Council for a 
determination as to whether Ms. Harper's fourth application for 
benefits should have been reopened under 20 C.F.R. Sec. 404.988(a). The 
council declined to reopen the fourth claim, finding that Ms. Harper 
had presented no new evidence as to her condition before December 31, 
1986. The council again determined that the fifth claim was barred by 
the doctrine of res judicata. In a well reasoned opinion filed by the 
district court (Graham, J.) on November 18, 1991, the court then 
dismissed Ms. Harper's lawsuit. This appeal followed.
    The first question we must address is whether the federal courts 
have jurisdiction. The pertinent statute, 42 U.S.C. Sec. 405(g), 
provides, in relevant part, as follows:

    ``Any individual, after any final decision of the Secretary made 
after a hearing to which he was a party, irrespective of the amount 
in controversy, may obtain a review of such a decision by a civil 
action commenced within sixty days. * * *'' (Emphasis supplied.)

    The Appeals Council determined that the final decision of the 
Secretary was the denial upon reconsideration of the fourth claim in 
1987. The final decision of the Secretary thus appears to have been 
made before any evidentiary hearing took place, which would normally 
preclude judicial review. A refusal to reopen a prior application is 
not a final decision and may not be reviewed by the courts. Califano v. 
Sanders, 430 U.S. 99, 107-09, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977); 
Blacha v. Secretary of Health and Human Services, 927 F.2d 228 (6th 
Cir.1990).
    Ms. Harper claimed before the district court, and she claims here, 
that she was deprived of property without due process of law in 
violation of her rights under the Fifth Amendment of the United States 
Constitution. As Califano noted, where a constitutional claim is made 
in conjunction with a social security benefits case, jurisdiction may 
attach outside the scope of 42 U.S.C. 405(g) and despite the 
foreclosure, in 42 U.S.C. 405(h), of general federal question 
jurisdiction over social security appeals. (The latter section provides 
that ``[n]o action against the United States, the Secretary, or any 
officer or employee thereof shall be brought under section 1331 or 1346 
of Title 28 to recover on any claim arising under this subchapter.'') 
The district court thus had jurisdiction to entertain Ms. Harper's 
constitutional claim, regardless of whether jurisdiction existed under 
42 U.S.C. 405(g).

II

    Ms. Harper contends, as we have said, that the action of the 
Appeals Council in vacating the ALJ's decision to grant a hearing on 
the merits and disposing of the case on res judicata grounds 
constituted a denial of due process. As a preliminary matter we note a 
potential stumbling block not addressed in the parties' briefs.
    Under the language of the Fifth Amendment, due process protections 

[[Page 31755]]
    attach only to ``life, liberty, or property.'' Ms. Harper could not 
prevail on her constitutional claim, therefore, without showing that 
she was deprived of ``property'' without due process of law. The 
existence of a property interest here is far from self-evident.

    ``The definition of property since the 1972 [Supreme Court] 
decision in Board of Regents v. Roth has centered on the concept of 
`entitlement.' The Court will recognize interests in government 
benefits as constitutional `property' if the person can be deemed to 
be `entitled' to them. Thus, the applicable federal, state or local 
law which governs the dispensation of the benefit must define the 
interest in such a way that the individual should continue to 
receive it under the terms of the law. This concept also seems to 
include a requirement that the person already has received the 
benefit or at least had a previously recognized claim of 
entitlement.'' 2 Rotunda & Nowak, Treatise on Constitutional Law 
Sec. 17.5(a) at 628 (1992).

    The right to due process applies to the termination of government 
benefits already being received, Goldberg v. Kelly, 397 U.S. 254, 90 
S.Ct. 1011, 25 L.Ed.2d 287 (1970), but Ms. Harper has never received 
disability benefits. Two of our sister courts of appeals have extended 
Goldberg to applicants for government benefits that have not yet been 
awarded. See Daniels v. Woodbury County, Iowa, 742 F.2d 1128 (8th 
Cir.1984) (finding applicants for general assistance on the county 
level had a right to due process), and Griffeth v. Detrich, 603 F.2d 
118 (9th Cir.1979), cert. denied sub nom. Peer v. Griffeth, 445 U.S. 
970, 100 S.Ct. 1348, 64 L.Ed.2d 247 (1980) (finding applicants for 
benefits under state general assistance program had a ``legitimate 
expectation of entitlement'' because of mandatory language in state 
statute).
    The Supreme Court has recognized a right to due process on the part 
of parole applicants who can point to a statute saying that prisoners 
``shall'' be released under certain conditions, Greenholtz v. Nebraska 
Penal Inmates, 442 U.S. 1, 99 S.Ct. 2100, 60 L.Ed.2d 668 (1979), but 
the Court has not determined whether applicants for monetary benefits 
have a similar right. See Lyng v. Payne, 476 U.S. 926, 942, 106 S.Ct. 
2333, 2343, 90 L.Ed.2d 921 (1986) (``We have never held that applicants 
for benefits, as distinct from those already receiving them, have a 
legitimate claim of entitlement protected by the Due Process Clause of 
the Fifth or Fourteenth Amendment''). See also Peer v. Griffeth, 445 
U.S. 970, 100 S.Ct. 1348, 64 L.Ed.2d 247 (1980) (Rehnquist, J., 
dissenting from denial of certiorari) (``Particularly when the only 
[California] appellate court to consider the question has concluded 
that there is no protected property interest under state law, this 
extension of Goldberg v. Kelly * * * should receive plenary 
consideration by this Court''). The Rotunda and Nowak treatise comments 
that ``[a]lthough the Court has not resolved this issue, under the 
`entitlement' principle it would appear that a person has no property 
interest in a benefit unless he has previously been granted it by the 
government.'' 2 Rotunda & Nowak, supra Sec. 17.5, at 629.
    This court was presented with an opportunity to adopt Griffeth's 
``mandatory language'' rationale in Baker v. Cincinnati Metropolitan 
Housing Authority, 675 F.2d 836 (6th Cir.1982). There the plaintiffs 
sought changes in procedures followed by a housing authority in 
determining eligibility for a new Housing and Urban Development 
program. The district court relied partially on Griffeth in determining 
that persons who could show they met the criteria for the program were 
entitled to due process protection. Baker v. Cincinnati Metropolitan 
Housing Authority, 490 F.Supp. 520, 532 (S.D. Ohio 1980). We decided on 
appeal that the procedures satisfied due process, but we did not 
specifically address the question whether due process was 
constitutionally required.
    In the case at bar we find it unnecessary to decide whether Ms. 
Harper had a ``property'' interest of which she could not be deprived 
without due process. Whether or not there was a property interest, Ms. 
Harper received all the process that would have been due under any 
hypothesis.
    The regulations promulgated by the Secretary make it clear that an 
unappealed denial upon reconsideration is a final decision. 20 C.F.R. 
Sec. 404.921 provides as follows:

    ``The reconsidered determination is binding unless--
    (a) You or any other party to the reconsideration requests a 
hearing before an administrative law judge within the stated time 
period and a decision is made;
    (b) The expedited appeals process is used; or
    (c) The reconsidered determination is revised.''

    Because the denial of Ms. Harper's fourth claim upon 
reconsideration was not appealed or revised, and because the denial was 
not followed by a timely request for a hearing before an ALJ, the 
denial was a final decision of the Secretary that was, according to the 
regulation, ``binding.'' The ALJ who heard Ms. Harper's fifth claim was 
aware of this problem, yet he offered no explanation of his failure to 
give the reconsidered denial of the fourth claim the binding effect 
prescribed by the regulation. The ALJ's decision to treat the earlier 
determination as non-binding appears to have been erroneous, and we 
know of no reason why it was not within the province of the Appeals 
Council to correct the error.
    In Mullen v. Bowen, 800 F.2d 535 (6th Cir.1986) (en banc), this 
court noted that the Appeals Council may review any determination by an 
ALJ that it chooses to review, whether or not there has been an 
application for such review.1 See id. at 545, 554 (Nelson, J., 
concurring). The Appeals Council is empowered to consider all aspects 
of a decision, even if the claimant seeks review of a portion only--and 
the council need not give notice to the claimant of its intent to 
review the entire decision. Gronda v. Secretary of Health & Human 
Services, 856 F.2d 36, 38-39 (6th Cir.1988), cert. denied, 489 U.S. 
1052, 109 S.Ct. 1312, 103 L.Ed.2d 581 (1989).2

    \1\ Since Mullen was decided, the Seventh Circuit, sitting en 
banc, has reversed an earlier panel decision and come down on 
Mullen's side. See Bauzo v. Bowen, 803 F.2d 917, 921 (7th Cir.1986) 
(en banc), overruling Scott v. Heckler, 768 F.2d 172 (7th Cir.1985). 
Seven circuits now adhere to Mullen's view; only the Third Circuit 
remains on the other side. See Mullen, 800 F.2d at 539 n. 4 (citing 
cases, including Powell v. Heckler, 783 F.2d 396 (3rd Cir.1986)).
    \2\ Gronda forecloses any argument that the council should not 
have been able to bar Ms. Harper's claim on res judicata grounds 
because she had no notice that res judicata might be used against 
her. The point is moot, however, in light of the council's letter of 
March 12, 1990, warning Ms. Harper of its intention to dismiss her 
claim on the basis of res judicata and inviting her arguments 
against such action.
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    Notwithstanding Mullen, Ms. Harper maintains that the ALJ's 
decision to grant a hearing was not subject to review by the Appeals 
Council. Even if the grant of a hearing was improvident, she suggests, 
the council could not set the grant aside and invoke the doctrine of 
res judicata after the ALJ had heard the claim on the merits. In cases 
that are almost exactly parallel to this one, however, the Courts of 
Appeals for the Fifth and Seventh Circuits have held that the council 
can reopen a decision by an ALJ to grant a hearing, and--even if a 
hearing has actually been held--can dismiss on res judicata grounds. 
Ellis v. Schweiker, 662 F.2d 419 (5th Cir.1981); Johnson v. Sullivan, 
936 F.2d 974 (7th Cir.1991). See also Taylor v. Heckler, 765 F.2d 872, 
874-77 (9th Cir.1985) (upon second application, ALJ reopened first 
application and found claimant disabled; Appeals Council vacated ALJ's 
decision and dismissed on res judicata grounds). We agree with these 
decisions, and we adopt their reasoning. 

[[Page 31756]]

    Poulin v. Bowen, 817 F.2d 865 (D.C. Cir.1987), relied on by Ms. 
Harper, is not in point. In Poulin the ALJ reopened a prior claim and 
considered it on the merits. The Appeals Council also considered the 
claim on the merits. The court of appeals simply held that where the 
Secretary does not rely on the res judicata defense in agency 
proceedings, he cannot raise it initially upon judicial review.
    Ms. Harper also contends that one of the forms she received from 
the agency was misleading about her right to future appeals of the 
denial of benefits. The brief she filed in this court refers to a 
letter she addressed to the Appeals Council on this issue, but the 
letter is not a part of the administrative record. Because the record 
does not indicate that the issue was raised at the administrative 
level, we are not in a position to consider the issue. See Hix v. 
Director, Office of Workers' Comp. Programs, 824 F.2d 526 (6th 
Cir.1987).
    For the reasons stated, we find no error in the decision of the 
district court. The order in which that court dismissed Ms. Harper's 
lawsuit is therefore AFFIRMED.

[FR Doc. 95-14775 Filed 6-15-95; 8:45 am]
BILLING CODE 4190-29-P