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SCOTUS Rules that Dismissal is Appealable

Empire Justice Center July 31, 2019

The U.S. Supreme Court issued several decisions this term affecting Social Security disability claimants.  In January, the Court issued a decision in Culbertson v. Berryhill, 139 Ct 537 (2019).  The Court held that 42. U.S.C. § 406(b)(1)(A)’s 25% cap applies only to attorney fees for court representation and not to the aggregate fees awarded under §§ 406(a) and (b).  In April, the Court decided Biestek v. Berryhill, which was summarized by Andrew Spink in the April 2019 edition of this newsletter.  The Court declined to adopt a categorical rule that the VE’s supporting data must be provided in order for the testimony to constitute substantial evidence.  Finally, in May, the Court decided Smith v. Berryhill, 139 S.Ct. 1756 (2019), deciding an Appeals Council dismissal of a request for review is a final decision subject to judicial review.

 

Petitioner Ricky Lee Smith’s claim for disability benefits under Title XVI was denied at the initial determination stage, upon reconsideration, and on the merits after a hearing before an Administrative Law Judge (ALJ).  The Appeals Council later dismissed Smith’s request for review as untimely. Smith sought judicial review of the dismissal in U.S. District Court, which held it lacked jurisdiction to hear the claim. The Sixth Circuit affirmed, maintaining that the Appeals Council’s dismissal of an untimely petition is not a “final decision” subject to federal-court review. On review, the Supreme Court unanimously held that where the SSA’s Appeals Council has dismissed a request for review as untimely after a claimant has obtained a hearing from an ALJ on the merits, the dismissal qualifies as a “final decision . . . made after a hearing” within the meaning of 42 U.S.C § 405(g).

 

The Court recognized the tension stemming from SSA’s regulations imposing deadlines for seeking review at each stage of the administrative review process. Pursuant to 20 C.F.R. § 416.1471, the Appeals Council may dismiss a request for review of an ALJ decision if the claimant misses the deadline and does not demonstrate good cause.  And according to 20 C.F.R. § 416.1472, a dismissal is considered “binding and not subject to further review.”  The Court nonetheless relied on the strong presumption for judicial review of administrative action to find the dismissal qualified as a final decision subject to review.

 

The Court distinguished its earlier decision in Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), which held that SSA’s denial of a claim to reopen was “a matter of agency grace” that could be denied without a hearing.  It emphasized that in this case, as opposed to a denial of a request for reopening, there had been a decision by an ALJ on the merits of the plaintiff’s claim. It such a case, the Court concluded, it appeared Congress favored more oversight by the courts.  The Court reiterated that the statute was designed to be unusually protective of claimants.  It noted, however, a more difficult question would be presented if the claimant’s request for a hearing had been dismissed as untimely and then sought Appeals Council review. Citing precedent that a hearing is not always required, the Court nonetheless declined to address that situation, as it was not before the Court.

 

The Supreme Court specifically restricted its review in this case to the procedural grounds that were the basis for the Appeals Council dismissal and remanded for the agency to address the substantive questions at issue in the claim.