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HOLLMAN v. HHS

November 13, 1980

Emanuel HOLLMAN, Plaintiff,
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant



The opinion of the court was delivered by: POLLACK

This is an action under Section 205(g) of the Social Security Act, 42 U.S.C. § 405(g), to review the determination of the Secretary of Health, Education and Welfare, now the Secretary of Health and Human Services (hereinafter "the Secretary"), not to amend her records to reflect additional self-employment income claimed by the plaintiff, Mr. Hollman.

Plaintiff was awarded Social Security disability benefits in 1965 based on a finding by the Secretary that Mr. Hollman had established a period of disability beginning March 31, 1961. On July 11, 1974, the plaintiff requested the Secretary to recalculate the level of benefits he was receiving to reflect increased self-employment earnings for the years 1952 through 1955. The Secretary agreed to revise Mr. Hollman's earnings record to reflect increased earnings reported on an amended tax return filed in June, 1956. As to other income in the years 1952 through 1954, Mr. Hollman's request for recalculation was denied. Contentions raised by Mr. Hollman in his request for reconsideration were rejected. On September 15, 1977, Mr. Hollman appeared before Administrative Law Judge Waldman and represented himself in a de novo administrative hearing. Judge Waldman rendered a written decision holding that Mr. Hollman was not entitled to correction of his self-employment income on October 27, 1977. The Appeals Council affirmed.

 On October 4, 1978, Mr. Hollman appeared before Judge Pollack, pro se, in an action under 42 U.S.C. § 405(g) to review the Secretary's determination. Judge Pollack held that the decision to deny relief "was entirely appropriate on the facts and the law." He granted summary judgment for the defendant. Mr. Hollman filed a brief and appendix in the Court of Appeals. After an initial appearance before the Court of Appeals, Mr. Hollman was assigned counsel. The Court granted Mr. Hollman's lawyer's motion to supplement the record to introduce additional evidence to establish that good cause exists under 42 U.S.C. § 405(g) to remand the case to the Secretary. Subsequently, the Court of Appeals vacated the judgment of the District Court and remanded for reconsideration by Judge Pollack stating that: "since appellant was unrepresented in the district court and since the issues raised by competent counsel are substantial, we believe it sound judicial administration to have these issues passed on in the first instance by the district court."

 On remand, counsel for Mr. Hollman argues two points: 1) that the limitation period in 42 U.S.C. § 405(c) is tolled by mental incompetency and that the case should therefore be remanded to the Secretary to determine whether Mr. Hollman was mentally incompetent during the relevant period and 2) that Judge Pollack should reconsider his original decision with respect to the year 1953 that Mr. Hollman's case did not fall within the "tax return" exception to the time limitation, 42 U.S.C. § 405(c)(5)(F)(i).

 For the reasons shown hereafter, the Secretary is entitled to summary judgment with respect to plaintiff's first point. With respect to plaintiff's second point, the case is remanded for consideration in light of the Court's holding herein.

 I.

 Mr. Hollman has supplemented the record with materials that suggest that he may have been mentally incompetent during the three year, three month and fifteen day time limitation periods following each of the years for which he now claims the right to have his records amended. Even if it were the case, however, that he was incompetent during these periods, the clear intent of the time limitation period incorporated in Section 205(c) of the Social Security Act, 42 U.S.C. § 405(c), is to bar his claim to amend his self-employment income.

 The scheme for providing self-employed persons with retirement insurance is carefully and tightly drawn. Prior to 1950, self-employed persons such as Mr. Hollman, were not even covered by Social Security because "there was no agreement on a feasible method of obtaining ... reports of their income." S.Rep.No.1669, 81st Cong., 2d Sess., reprinted in (1950) U.S.Code Cong.Serv. pp. 3287, 3299. When Congress decided in 1950 to amend the Act to include self-employed persons in the retirement insurance system, the crucial factor in the decision was the existence of a workable mechanism for determining their earnings. "Reliance on the income tax system was regarded as the only workable plan." Shore v. Califano, 589 F.2d 1232 (3rd Cir. 1978).

 Under the statute the Secretary is charged with the responsibility of establishing and maintaining records of wages and self-employment income. 42 U.S.C. § 405(c)(2)(A). Actions by individuals to amend the Secretary's records of wages or self-employment income are subject to a time limitation of three years, three months and fifteen days following the year at issue. 42 U.S.C. § 405(c)(1)(B). With respect to actions by individuals to amend the Secretary's records after the time limitation period, the statute distinguishes between wage-earners and self-employed persons. Whereas for wage-earners the absence of an entry in the Secretary's records is only presumptive evidence after the expiration of the time period, as to self-employed persons:

 
the absence of an entry in the Secretary's records as to the self-employment income alleged to have been derived by an individual in such year shall be conclusive for purposes of this subchapter that no such alleged self-employment income was derived by such individual in such year unless it is shown that he filed a tax return of his self-employment income for such year before the expiration of the time limitation following such year, in which case the Secretary shall include in his records the self-employment income of such individual for such year.

 42 U.S.C. § 405(c)(4)(C) (emphasis supplied).

 There are ten specific exceptions to the conclusive effect after the expiration of the time limitation period. 42 U.S.C. § 405(c)(5). Mental incompetency is not among them. "As a general rule, "where a statute makes certain specific exceptions to its general provisions, it is generally safe to assume that all other exceptions were intended to be excluded.' " Herzberg v. Finch, 321 F. Supp. 1367, 1369 (S.D.N.Y.1971) (quoting McCaffrey, Statutory Construction 125 (1953)) (interpreting 42 U.S.C. § 402(d)(5)). In this case, where the right to social security benefits is a right created by Congress, the time limitation incorporated by Congress must be strictly construed. Ewing v. Risher, 176 F.2d 641, 644 (10th Cir. 1949). "Though this conclusion may seem harsh, we must follow the plain mandate of Congress when, as here, it is acting within its powers to prescribe conditions and limitations as a means of preserving the fiscal integrity of the fund." Johnson v. United States, 572 F.2d 697, 699 (9th Cir. 1978) (holding that incapacity does not excuse failure to file for social security benefits under 42 U.S.C. § 402). As one court has put it:

 
It is unfortunate that plaintiff must go without the insurance benefits. But the immensity of the problem of providing Social Security "called forth a highly complex and interrelated statutory structure.' The mandate to the Secretary in 42 U.S.C. § 405(c)(2) to maintain HEW records of self-employment income was necessary for the determination in an orderly manner of the innumerable requests for insurance benefits. Congress recognized that a beginning and end of time for establishing eligibility was an essential part of that need by prescribing a "time limitation" within which changes and revisions in the Secretary's records might be made. One need only be reasonable to foresee the disaster in HEW if there were not a reasonable time limitation for ending disputes about eligibility benefits.

 Lasch v. Richardson, 457 F.2d 435, 440 (7th Cir.) cert. denied 409 U.S. 889, 93 S. Ct. 160, 34 L. Ed. 2d 146 (1972) (holding that the time limitation in 42 U.S.C. § 405(c) does not offend the due process clause) (citation omitted). This court is not empowered to legislate where Congress has failed to do so. Congress having failed to include mental incompetency among the exceptions to the ...


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