Smith v. Berryhill

Issues 

When the Social Security Administration’s Appeals Council dismisses a disability claim for not being filed on time, does that dismissal qualify as an agency’s “final decision” subject to judicial review under Section 405(g) of the Social Security Act, codified at 42 U.S.C. § 405(g)?

Oral argument: 
March 18, 2019

The Supreme Court will determine whether a decision by the Social Security Administration’s Appeals Council rejecting a claim for disability benefits on untimeliness grounds is a “final decision,” and therefore subject to judicial review under Section 405(g) of the Social Security Act. Petitioner Ricky Lee Smith, supported by Respondent Acting Commissioner Nancy A. Berryhill, contends that the plain text of Section 405(g), as well as the Supreme Court’s interpretation of other administrative decisions, demonstrate that a decision on untimeliness grounds is a final decision for the purposes of judicial review. Amicus Curiae Deepak Gupta, who the Supreme Court to defend the Sixth Circuit’s judgment that such a decision does not constitute a “final decision” under Section 405(g), counters that Section 405(g)’s specific statutory context mandates that final decisions be understood only as decisions on the merits, not decisions on procedural grounds. This case will have important implications for untimeliness determinations, courts’ interpretations of final decisions, and social security litigation.

Questions as Framed for the Court by the Parties 

Whether the decision of the Appeals Council—the administrative body that hears a claimant’s appeal of an adverse decision of an administrative law judge regarding a disability benefit claim—to reject a disability claim on the ground that the claimant’s appeal was untimely is a “final decision” subject to judicial review under Section 405(g) of the Social Security Act, 42 U.S.C. § 405(g).

Facts 

Petitioner Ricky Lee Smith received disability benefits from Social Security between 1988 and 2004, until his financial resources increased to the point that he was no longer eligible for the benefits.  Smith v. Comm’r of Soc. Sec., 880 F.3d 813, 815 (6th Cir. 2018). In 2012, Smith submitted another application for supplemental assistance, citing additional medical problems because of his original disability. Id. His application was initially denied and was again rejected upon reconsideration. Id. Smith requested a hearing before an administrative law judge (“ALJ”). Id. He filed his request on time. Id. The ALJ reviewed Smith’s request and denied the claim on March 26, 2014. Id. Smith had sixty days to appeal the decision. Id.

Smith claims that he sent a letter to the Social Security Administration’s (“SSA”) Appeals Council (“Council”) on April 24, 2014. Id. The SSA, however, asserts that it did not hear from Smith until September 21, 2014, when Smith sent a fax asking about the status of his appeal. Id. The fax included a copy of Smith’s appeal form, dated April 24, 2014. Id. Smith received a letter from a SSA representative dated October 1, 2014. Id. The representative told Smith that there was no copy of his request in the SSA’s “electronic folder,” and that if the SSA had received his request, it would have mailed him a receipt. Id. The representative also told Smith that they had mailed a completed request for review, as well as Smith’s request for review to the Appeals Council, and that the request was dated October 1, 2014. Id.           

The Appeals Council dismissed Smith’s request for review as untimely because the Council had not received it before the sixty-day deadline. Id. Furthermore, the Council ruled that because Smith’s attorney could not present proof that Smith had sent the letter within the sixty-day timeframe, there was not good cause to allow for a filing extension. Id.

Smith appealed the Council’s decision to the federal district court for the Eastern District of Kentucky. Id. The district court dismissed the case, explaining that according to Section 405(g) of the Social Security Act, codified at 42 U.S.C. § 405(g), the court could only review a “final decision of the Commissioner of Social Security made after a hearing.” Brief of Court Appointed Amicus Curiae, in Support of the Judgment Below at 11. The district court went on to explain that the Council’s dismissal of an untimely application is not a final decision and cannot be reviewed. Id.           

Smith appealed the district court’s opinion to the United States Court of Appeals for the Sixth Circuit. Smith v. Comm’r of Soc. Sec., 880 F.3d at 815. The Sixth Circuit dismissed the case for lack of jurisdiction, following the same reasoning as the district court. Id. at 814. The Sixth Circuit relied in part on a decision from the United States Court of Appeals for the Eighth Circuit, Smith v. Heckler. In Smith, the Eighth Circuit explained that a dismissal untimeliness was not a dismissal on the merits, and that allowing review in such a situation would render the SSA’s procedures meaningless. Id. at 817.

The United States Supreme Court granted certiorari on November 2, 2018. Acting SSA Commissioner Berryhill, the original respondent, submitted a brief asserting that the United States government had changed its position to support Smith’s argument that the Sixth Circuit’s holding should be reversed. The Court appointed Deepak Gupta as amicus curiae to argue in favor of the Sixth Circuit’s holding.

Analysis 

MEANING OF THE TERM “FINAL DECISION” UNDER SECTION 405(G) OF THE SOCIAL SECURITY ACT

Smith argues that the Appeals Council’s decision to reject a claim on untimeliness grounds falls within the plain meaning of the term “final decision,” as used in Section 405(g). Brief for Petitioner, Ricky Lee Smith at 13. Smith asserts that although the term “final decision” is not defined in Section 405(g), several dictionary definitions of the word “final” describe the word as referring to something that comes “at the end,” or marks the “last stage in a process.” Id. at 14. Berryhill similarly contends that dismissal by the Council constitutes a final decision with reference to both the ordinary meaning of the word “final” and to the Supreme Court’s precedent regarding final administrative decisions. Brief for Respondent, Nancy A. Berryhill at 18. Smith notes that the Court has consistently held that an agency decision is final when it constitutes the “‘consummation’ of the agency’s decision-making process,” and determines what obligations or legal consequences will follow from a dispute. Brief for Petitioner at 15. Smith also posits that the inclusion of the word “any” immediately before the phrase “final decision” in Section 405(g) demonstrates Congress’s intent that the term be construed broadly. Id at 16. According to Smith, construing the Council’s rejection of his claim as a final decision is the interpretation that most strongly conforms to each of these principles. Id. at 15–16. Smith asserts that the Council’s decision was the last step in the review process for disability claims, and that the decision has legal consequences with respect to its denial of Smith’s benefits claim. Id. Smith and Berryhill both contend that even though the decision did not address the merits of Smith’s claim, nothing in the plain language of the statutes that authorize review of final decisions distinguishes between decisions on the merits and decisions on procedural grounds. Brief for Petitioner at 16; Brief for Respondent at 20–21.

Smith further claims that the Sixth Circuit’s reliance on a case involving the reopening of a seven-year-old disability benefits claim is misguided. Brief for Petitioner at 17. Smith asserts that the claim at issue here was Smith’s first chance to obtain judicial review, rather than a second attempt to obtain review that was made years after the original window of opportunity had closed. Id. at 18. Smith and Berryhill also point to the United States Court of Appeals for the Eleventh Circuit’s statement that judicial review plays a very different role in the administrative decision-making process than does reopening, especially with regard to finality. Brief for Petitioner at 18; Brief for Respondent at 23. Smith and Berryhill contend that this is because reopening a claim gives the claimant an additional chance to obtain review of a final decision, whereas a decision to dismiss a claim as untimely provides the first chance to obtain review. Brief for Petitioner at 18–19; Brief for Respondent at 23–24. Thus, Smith and Berryhill maintain that a rejection for untimeliness does not implicate concerns about claimants receiving an additional “bite at the apple.” Brief for Petitioner at 19; Brief for Respondent at 24.

Gupta counters that Smith and Berryhill mistakenly rely on doctrines and precedent arising out of Administrative Procedure Act (“APA”) cases. Brief of Court-Appointed Amicus Curiae Deepak Gupta, in Support of the Judgment Below at 17. Gupta argues that when Congress enacted the APA, it did not intend for the statute’s general grant of judicial review of agency action to be duplicated within every preexisting statutory regime. Id. As such, Gupta contends that Section 405(g) must be interpreted not in reference to general APA doctrines, but to the SSA’s statutory context. Id. at 18. Given that the SSA adjudicates millions of small social security claims every year, Gupta asserts that the most compelling interpretation of the term “final decision” is that it refers to the final disposition of a claim on its merits. Id. at 23. Gupta posits that most courts addressing this issue have reached this same conclusion. Id. He also notes that the structure of Section 405(g) supports this interpretation, because the statute never requires the SSA Commissioner to hear untimely requests for review. Id. at 23.

In addition, Gupta points out that Section 405(g) only provides for judicial review of hearings if the Social Security Act expressly mentions such hearings. Id. at 33. Thus, he argues that it makes no difference whether the claimant is seeking review of an untimeliness decision or is seeking review of a decision not to reopen a claim. Id. at 31–33.

THE PRESUMPTION IN FAVOR OF JUDICIAL REVIEW

Smith asserts that the Supreme Court has recognized a longstanding presumption in favor of judicial review of administrative decisions. Brief for Petitioner at 16–17. According to Smith, this presumption reflects Congress’s goal of placing reasonable limits on the power of administrative agencies. Id. Smith emphasizes the Court’s prior statement that if a statute “can reasonably be read to permit judicial review,” judges should interpret it as such. Id. at 17. Smith therefore argues that even if Section 405(g) was ambiguous as to whether the term “final decision” includes rejections on untimeliness grounds, construing it to include those decisions is still a reasonable interpretation. Id. Smith maintains that this is sufficient to allow judicial review. Id. Moreover, Smith and Berryhill contend that an agency regulation precluding Appeals Council dismissals from receiving judicial review cannot circumvent Congress’s pronouncement that judicial review must be available for all “final decisions.” Brief for Petitioner at 19; Brief for Respondent at 21–22.

Gupta contends that the Social Security Act should not be read as “secretly embodying” the APA’s presumption in favor of judicial review of agency decisions because Congress enacted the APA years after the Social Security Act. Brief for Court-Appointed Amicus Curiae Deepak Gupta at 17.  Instead, Gupta argues that when a statute is silent or ambiguous on a specific point, courts must defer to the relevant agency’s reasonable interpretation of the text. Id. at 42. Gupta asserts that the SSA’s understanding of “final decisions,” as used in Section 405(g), is reasonable, and thus is entitled to this deference. Id. at 40–41. Gupta claims that the parties have made no attempt rebut that presumption of deference, which the Supreme Court has frequently recognized while citing the “need for agency expertise and administrative experience” in such matters. Id. at 41–42.

OTHER PREREQUISITES FOR JUDICIAL REVIEW

Smith argues that his case meets the other requirements for judicial review of an Appeals Council decision. Brief for Petitioner at 23. Smith first points to the hearing requirement under Section 405(g), which allows for review of any final decision “made after a hearing to which the claimant was a party.” Id. Smith and Berryhill assert that this requirement is undoubtedly met, because an ALJ conducted a hearing on Smith’s benefits claim. Brief for Petitioner at 23; Brief for Respondent at 17. Smith then addresses the nonwaivable Section 405(g) requirement that a claim be presented to the agency before it is litigated in court, and the waivable requirement that the remedies the Council prescribes be exhausted before review is available. Brief for Petitioner at 23–24. Smith and Berryhill claim that that the nonwaivable requirement has been satisfied because Smith did file a claim with the agency. Id.; Brief for Respondent at 16–17. As for the waivable requirement, Smith and Berryhill likewise assert that Smith has exhausted all remedies that were available to him following his hearing and the decision to reject his benefits claim. Brief for Petitioner at 23–24; Brief for Respondent at 17. Smith posits that his strong interest in having his claim resolved promptly may constitute grounds for having the requirement waived independent of a determination by the agency as to whether it should be waived. Brief for Petitioner at 23–25.

Smith also points to prior case law stating that all issues need not be raised before the Council to preserve those issues for judicial review. Id. at 24–25. Smith contends that by rejecting an untimeliness decision by the Council, a court could address issues that a claimant who has exhausted all their remedies did not raise before the Council. Id. at 25.

In contrast, Gupta contends that Smith’s case does not meet the hearing requirement for judicial review. Brief of Deepak Gupta at 27. Gupta notes that under Section 405(g), untimely decisions do not have to be given hearings. Id. at 34. According to Gupta, existing case law suggests that the hearing requirement should be interpreted as referring specifically to hearings that are required by statute. Id. at 33. Gupta also claims that the waivable exhaustion requirement is linked to the meaning of the phrase “final decision” under Section 405(g). Id. at 24. As such, Gupta contends that because the decision on Smith’s claim was not a final, Smith did not exhaust all of his administrative remedies. Id. at 22, 24.

Finally, Gupta asserts that a claimant who does not request review on all issues raised before the Council may not receive judicial review. Id. at 22. Gupta contends that this is the case because failing to request review on all issues means that the claimant has not exhausted all available administrative remedies. Id. Gupta notes that the only relevant instance where the Court waived the exhaustion requirement was in a case involving a constitutional claim, which is distinct from the type of claim at issue here. Id. at 35.

Discussion 

HARM TO APPLICANTS VERSUS HARM TO PRECEDENT

The National Organization of Social Security Claimants’ Representatives (“NOSSCR”), in support of Smith, argues that the Court should reverse the Sixth Circuit’s decision because forbidding review of Appeals Council dismissals hurts applicants who have compelling justifications for missing filing deadlines by limiting their “recourse to the courts.” Brief of Amicus Curiae National Organization of Social Security Claimants Representatives (“NOSSCR”), in Support of Petitioner at 18. NOSSCR contends that when an applicant asks for review after missing the filing deadline without good cause, the Council’s dismissals tend to be both hurried and wrong. Id. at 18–19. Thus, NOSSCR asserts that justified applicants are frequently denied aid, with no further means to appeal the Council’s decisions. Id. NOSSCR also maintains that affirming the Sixth Circuit’s decision will hurt applicants who have been denied years of benefits during the processing time for Social Security claims because their claims will be dismissed as untimely and they will have no way to request review of their cases. Id. at 28–29.

Gupta, in support of the judgment below, argues that reversing the Sixth Circuit's decision would undermine years of precedent during which courts have relied on Section 405(g) to limit the review of Social Security decisions to those that have had a hearing. Brief of Court Appointed Amicus Curiae, in Support of the Judgment Below at 33. Furthermore, Gupta contends that because only the United States Court of Appeals for the Seventh Circuit has held that Section 405(g) allows for judicial review on timing determinations, reversing the Sixth Circuit's decision would upset the state of the law in other federal courts. Id. at 37. Moreover, Gupta asserts that the Court should affirm the Sixth Circuit’s decision because the predominant reading of Section 405(g) has influenced courts’ interpretations of “final decisions” as they relate to Medicare cases. Id. at 40. Thus, Gupta suggests that overruling the Sixth Circuit could permit timeliness appeals in Medicare Board Review cases as well. Id.

BALANCING THE NEED FOR REVIEW AND THE BURDEN ON COURTS

NOSSCR argues that the Court should reverse the Sixth Circuit because in other circuits that have reviewed dismissals for untimeliness, federal courts regularly reverse the Commissioner's finding that applicants missed the application deadline. Brief of NOSSCR at 13. NOSCCR maintains that these rulings suggest that the SSA’s determinations are unreliable. Id. Furthermore, NOSSCR asserts that the Court should reverse the Sixth Circuit because a single Administrative Appeals Judge, who is overworked and may be pressed for time, is making an unreviewable decision. Id. at 21. NOSSCR points out that in circuits that do not review dismissals for untimely applications, other reviewable Social Security cases are often wrongly decided. Id. at 24. NOSSCR therefore extrapolates that dismissals for untimely applications also tend to be decided incorrectly. Id. at 26. Moreover, NOSSCR asserts that reversing the Sixth Circuit would not impose an undue burden on federal courts, because allowing dismissal appeals would likely result in less than 600 additional appeals to the federal courts each year. Id. at 27.

Gupta argues that the current status of Section 405(g) needs to be upheld so that federal courts will not be overrun by Social Security cases. Brief of Court Appointed Amicus Curiae at 19. Gupta contends a reversal of the Sixth Circuit will result in dramatic litigation increases, based on the nearly 20,000 federal Social Security cases that claimants filed in 2017. Id. at 44. Gupta asserts that the additional number of claims would impose a severe burden that neither the SSA nor the judiciary is prepared to handle. Id. Gupta further contends that this additional burden is unjustified because the SSA is well-equipped to handle certain routine questions, including whether an application was filed on time, and if not, whether there was an adequate excuse. Id. at 45–46.

Edited by 

Acknowledgments 

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