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SCHISLER v. HECKLER

November 18, 1983

ROBERT SCHISLER, MARY MICELLI, PAULETTE BEARD, FRANK POWROZNIK, ROSE REESE, HARRY DELANDRO, MARJORIE HILTS, CINDA COLEMAN, ROSE MITCHELL and KATHRAN TENNANT, On Behalf of Themselves and All Other Individuals Similarly Situated, Plaintiffs,
v.
MARGARET M. HECKLER,1 as Secretary of the United States Department of Health and Human Services, BARBARA BLUM, as Commissioner of the New York State Department of Social Services, and SIDNEY HOUBEN, as Director of Social Services Bureau of Disability Determinations, Defandants.



The opinion of the court was delivered by: ELFVIN

MEMORANDUM and ORDER

Plaintiffs in this class action challenging certain practices of the defendant Secretary of the United States Department of Health and Human Services ("the Secretary"), the Commissioner of New York's Department of Social Services ("the DSS"), and the director of the DSS's Bureau of Disability Determinations (more correctly, its Office of Disability Determinations) ("the ODD"), have moved for certification of a subclass of plaintiffs and for broad preliminary injunctive relief as to such subclass.

 During the pendency of this motion the Court was informed that plaintiffs and the two State defendants -- the DDS and the ODD -- have agreed on the basic terms of a settlement of their dispute. Such settlement has been finalized and approved by the Court. Such settlement does not put an end to the plaintiffs' grievances with the Secretary due to the fact that procedural reforms adopted by the DSS and the ODD are not binding on the Social Security Administration ("SSA"). SSA could reject such voluntary reforms by refusing to reimburse ODD for the use of the new procedures, or by considering their use to be procedural errors when SSA is evaluating the performance of ODD. In addition, the settlement cannot provide relief to the class members who have already had their benefits wrongfully terminated by inadequate continuing disability investigations inasmuch as only SSA has the means to identify each such plaintiff. The settlement binds the DSS and the ODD to request such data from SSA but there can be no assurance that such will be forthcoming. These class members will only be able to be assured of any benefit from the settlement if this Court orders a reinstatement of benefits or a reopening of prior cessation decisions.

 On August 12, 1982 and in response to plaintiffs' motion, I certified a class of plaintiffs consisting of

 "all persons who have been or will be found eligible for the Title II disability insurance benefits and SSI [Supplemental Security Income] disability benefits and with respect to whom review of continuing disability has been or will be made by the New York State Department of Social Services [Office] of Disability Determinations pursuant to its agreement with the Social Security Administration without substantial medical evidence to show that their medical condition has improved since their original determination of disability to the point where he or she is able to engage in substantial gainful activity." Memorandum and Order II.

 The motion seeks to certify a subclass of plaintiffs consisting of present class members who are disabled by mental impairments on the ground that the latter assertedly experience unique hardship from the conduct of defendants' reviews of their eligibility for benefits.

 The request for injunctive relief, set forth in full in the margin, *fn2" seeks to require defendants to follow certain procedures in the conduct of defendants' Accelerated Continuing Disability Investigation ("ACDI") program, a term explained below. The procedures currently in use allegedly violate the subclass's rights under the Fifth Amendment and the Fourteenth Amendment, the Social Security Act and the Administrative Procedure Act, in that such procedures allow and have allowed the subclass's Social Security ("Title II") and Supplemental Security Income ("SSI") benefits to be terminated without due process and without sufficient evidence of cessation of disability.

 Subclass Certification

 Plaintiffs have moved for certification of a subclass consisting of members of the original class

 "who have been or will be found eligible for Title II disability insurance benefits or SSI disability benefits due to a mental disability, in whole or in part, and with respect to whom review of continuing disability has been or will be made by the New York State Department of Social Services Office of Disability Determinations, pursuant to its agreement with the Social Security Administration."

 I find that designation of such a subclass is appropriate in this action due to the unique due process consideerations presented by the defendants' communications to and interaction with mentally impaired individuals. The disabling conditions burdening mentally impaired recipients well may hinder their ability to respond to notification that a CDI is to be performed, as well as their abilities to participate effectively in the CDI process and to exercise their right to appeal a determination by defendants that benefits are to be terminated. Fed.R.Civ.P. rule 23 provides sufficient flexibility to enable this Court to limit various types of relief to differing class members. Shivelhood v. Davis, 336 F. Supp. 1111, 1113 (D.Vt. 1971). The subclass meets the numerosity requirement of rule 23(a)(1) in that plaintiffs estimate that there are approximately 160,000 individuals in the subclass; there are also common questions of law and fact as required by Fed.R.Civ.P. rule 23(a)(2) regarding the CDI procedures and their compliance with due process guarantees. Additionally, five of the ten named plaintiffs are mentally impaired and their claims are typical of those of the subclass, as called for by Fed.R.Civ.P. rule 23(a)(3). These representative parties will provide the fair and adequate protection of the subclass mandated by Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 562 (2d Cir. 1968), vacated and remanded on other grounds, 417 U.S. 156, 94 S. Ct. 2140, 40 L. Ed. 2d 732 (1974). The designation of this subclass will permit me to address the separate preliminary injunctive relief sought on behalf of these individuals.

 Preliminary Relief.

 The plaintiffs' request for a preliminary injunction seeks a directive containing prohibitory and mandatory relief. First, plaintiffs ask for an order ensuring that no subclass member has his or her benefits terminated for "failure to cooperate" unless an in-person home visit and other attempts at notification have been completed. Second, an order relating to the CDI evidence development procedures is sought. Third, plaintiffs urge that defendants be bound by the findings of a subclass member's treating source concerning the mental disorder, unless there exists substantial evidence to the contrary. Finally, an order is requested voiding the benefits terminations and reinstating full benefits of all subclass members since the ACDI program began in March 1981, that have not been reversed on subsequent appeal.

 The Secretary has, at the outset, raised several objections to this Court's exercise of jurisdiction over plaintiff's motion for injunctive relief.

 It is first urged that there is no basis laid in the Complaint for the relief requested in this motion in that the ACDI process was not implemented until March 1981, whereas the Complaint was filed in the previous year. However, the grievances regarding the ACDI process recited in plaintiffs' moving papers and supporting affidavits and briefs are mostly of the same kind as are recited in the Complaint, which assails the alleged practices of terminating benefits without adequate consultation of and reliance upon treating physicians and professionals and through excessive reliance upon examinations by consultative physician examiners. Importantly, the Complaint stresses the mental and emotional harm to plaintiffs of being subjected needlessly to cessation notices and the subsequent review process due to defendants' allegedly statutorily and constitutionally deficient standards and procedures. The Complaint is not so narrow as the Secretary urges; it is not confined to the allegation that termination decisions must be made only upon substantial medical evidence of cessation of disability, although such is a major focus of the Complaint. Plaintiffs' moving papers charge that there is a "cessation bias" intrinsic in the ACDI program as conducted, a matter not raised in the pre-ACDI Complaint, but such charge seeks to establish only the root cause of the subclass's grievances, which grievances are of the same sort as those stated in the Complaint. The one grievance listed in plaintiffs' moving papers not mentioned in the Complaint is that defendants terminate benefits for recipients' "failure to cooperate" with review procedures prior to making appropriate efforts to ensure that recipients are aware of an ongoing review and that they are physically and mentally able to cooperate with the review procedures. Nonetheless, such grievance is within the scope of the Complaint's allegations of inadequate procedural protections and, in conformity with the directive of Fed.R.Civ.P. rule 8(f) that "[a]ll pleadings shall be so construed as to do substantial justice" and with modern notice-pleading concepts, ought to be deemed included in the Complaint. To force plaintiffs to undergo the empty exercise of amending their Complaint so as to support more explicitly their request for injunctive relief is in no one's interest.

 The Secretary's second jurisdictional objection is to the effect that the proof of plaintiffs' claims raised on the motion for an injunction would necessarily involve examination by the Court of hundreds of individual case files in order to determine whether defendants are or are not complying with the procedures set by their own regulations "in all cases, or at least a large majority of cases." Such exercise assertedly would be contrary to Califano v. Sanders, 430 U.S. 99, 51 L. Ed. 2d 192, 97 S. Ct. 980 (1977), and other decisions holding that "individual review of [Title II and SSI benefit] determinations can be accomplished only through individual appeals pursuant to 42 U.S.C. § 405(g) and (h) after the full exhaustion of administrative remedies." Such contention, however, is so wholly contrary to the decision of the United States Court of Appeals for the Second Circuit in Ellis v. Blum, 643 F.2d 68 (1981), as not to require extended discussion. Even if it will be necessary, as the Secretary contends, to review many individual cases in order to determine the adequacy of her procedures, such will not be the sort of review of individual claims as to which 42 U.S.C. § 405(g) provides the exclusive jurisdictional basis, but will be merely an examination of evidence relevant to the overarching claim in this case, which examination is available under 28 U.S.C. § 1361 and Ellis v. Blum.

 The Secretary's further contention that plaintiffs' request for reinstatement of benefits makes the injunction motion not "the type of solely regulatory challenge which the United States Court of Appeals for the Second Circuit has held are within the Court's jurisdiction pursuant to 28 U.S.C. § 1361" also has overlooked the ramifications of the Ellis v. Blum decision, wherein the court addressed this specific concern:

 "While it is true that the complaint did seek reinstatement of benefits for those members of the class who had been terminated without receiving a pretermination notice containing a statement of reasons and a summary of evidence, we are not convinced that a temporary reinstatement of benefits pending compliance with due process is the kind of recovery that Congress had in mind when it enacted [42 U.S.C.] § 405(h) in 1939.And in any event, we do not see much sense in making our jurisdiction depend upon a less thorough pleading of the relief desired." 643 F.2d at 82.

 This passage means at least that the mere request for reinstatement of benefits does not make inappropriate the entertainment of plaintiffs' injunction request under 28 U.S.C. § 1361 and 42 U.S.C. §§ 405(g) and 405(h), as such request may be denied. Read "for all it's worth," the passage allows that an award of temporary reinstatement of benefits due to lack of due process in the termination thereof can be appropriate relief in class actions such as this.

 It has been held that section 1361 mandamas jurisdiction is adequate for an award of liquidated sums wrongfully withheld by a federal official or agency if either of the latter has a duty of paying such sums to the claimant, (but not for awards of unliquidated sums in the nature of damages). See, e.g., United States v. Commonwealth of Pennsylvania, 394 F. Supp. 261, 265 (M.D.Pa. 1975). If reinstatements of benefits are appropriate in this case, the amounts involved may be considered "liquidated" in that such amounts are certain or definitely ascertainable through computation. The federal official or agency involved may be held to owe a duty of temporary reinstatement to the claimants involved if due process was denied in the termination of benefits. I conclude that under 28 U.S.C. § 1361, Ellis v. Blum, supra, and other judicial constructions of section 1361, this Court is authorized to order reinstatement by the Secretary of temporary benefits if otherwise appropriate.

 During the pendency of the instant motion, the Secretary invited my attention to the recent decision of the United States Court of Appeals for the Second Circuit in Smith v. Schweiker, 709 F.2d 777 (1983). The Secretary asserts that the Smith ruling requires the dismissal of the instant action due to the lack of subject matter jurisdiction. However, a careful reading of the opinion reveals that subject matter jurisdiction does in fact exist in the instant action both as to the original class and as to the subclass now sought to be created.

 In Smith, also a class action, the plaintiffs sought to challenge the Secretary's test of "current disability" and to require that medical improvement of the recipient be proven prior to a termination of benefits. The appellate court found that jurisdiction could not be based in that case on federal question jurisdiction (28 U.S.C. § 1331) or on mandamus jurisdiction (28 U.S.C. § 1361) or on a civil rights claim under 28 U.S.C. § 1343. In addition, the Court held that jurisdiction could not be premised on Title II of the Social Security Act, 42 U.S.C. § 405(g), inasmuch as those plaintiffs had not exhausted their administrative remedies. A waiver of the exhaustion requirement was not ...


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