The opinion of the court was delivered by: LASKER
These cases present a question whose determination has twice been reserved by the Court of Appeals for this Circuit:
whether the denial of federal disability claims under the so-called "severity regulation" adopted by the Secretary of Health and Human Services (the "Secretary") violates the Social Security Act (the "Act") because the regulation conflicts with the definition of "disability" contained in the Act. Under the regulation,
claims for disability benefits under the Supplemental Security Income ("SSI") or Old Age Survivors and Disability Insurance ("OASDI") programs are denied without regard to the claimant's to prior work, or other vocational factors, if the claimant's impairment is judged to be "not severe" based on medical criteria alone. In recent weeks, two judges of this Court, ruling on individual Social Security appeals, have reversed the Secretary's denial of benefits under the severity regulation, holding that the severity regulation conflicts with the statutory definition of disability and is invalid.
In the instant cases, the individual plaintiffs, on behalf of themselves and all other similarly situated, together with the State of New York and the Commissioner of the New York State Department of Social Services, seek declaratory and injunctive relief against the Secretary's use of the severity regulation in evaluating disability claims, and against her policy of refusing to consider the combined effects of impairments found to be "non-severe."
Jurisdiction is alleged under 42 U.S.C. §§ 405(g) and 1383(c)(3), which provide for judicial review of the Secretary's decisions as to disability benefits; 28 U.S.C. § 1331 (federal question jurisdiction), and 28 U.S.C. § 1361 (mandamus jurisdiction).
This memorandum addresses plaintiffs' motion for class certification and for a preliminary injunction. In a separate memorandum issued this date, motions to intervene by the State of New York, the Commissioner of the New York State Department of Social Services, and claimants Ricardo Ramirez, Ophelia Casey, Dominga Carrasquillo, and Joanne Lockett have been granted.
A. Statutory and Regulatory Background
The OASDI and SSI programs provide for the payment of benefits to disabled persons. Under both programs, a person is considered disabled if he or she is unable
"to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months . . ."
The Act provides that "for purposes of" applying this definition, an individual
"shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. . . ."
The Secretary is authorized to establish rules and regulations, consistent with the Act, governing the determination of disability claims.
Before 1978, the Secretary's regulations
set forth a general discussion of the factors to be applied in evaluating disability claims. In pertinent part, it was stated that disability
"is determined from all the facts of [the] case. Primary consideration is given to the severity of the individual's impairment. Consideration is also given to such other factors as the individual's age, education, and work experience. Medical considerations alone can justify a finding that the individual is not under a disability where the only impairment is a slight neurosis, slight impairment of sight or hearing, or other slight abnormality or a combination of slight abnormalities. On the other hand, medical considerations alone . . . can, except where other evidence rebuts a finding of "disability" . . . justify a finding that the individual is under a disability where his impairment . . . is listed in the appendix to the subpart. . . ."
In 1978 the Secretary revised the regulations, establishing a five-step sequential procedure for determining whether a claimant is disabled.
These regula tions were modified again in 1980, primarily to make their language clearer.
Under the existing regulations, if the claimant is found not to be disabled under any one of the sequential tests, the analysis ends and the remaining steps of the analysis are not completed. As the first step, the Secretary ascertains whether the claimant is working; if so, a finding of "not disabled" follows. Next (step 2), the Secretary determines, solely on the basis of medical factors, whether the claimant has a "severe" impairment which "significantly limits [his] physical or mental ability to do basic work activities." The regulation specifically provides that at this step the Secretary "will not consider your age, education, and work experience."
If the claimant is determined to have a "severe" impairment under this definition, the Secretary next considers (step 3) whether the impairment is one which is listed in Appendix 1 of the regulations; if so, the claimant is found to be disabled without requirement of further proof that the impairment prevents him from working. The fourth step comes into play if the claimant's impairment, though deemed "severe" under step 2, is not a "listed" impairment under step 3. In such cases, the Secretary determines whether, despite the claimant's impairment, he is able to perform his past work. If not, the Secretary determines (step 5) whether, considering the claimant's age, education, and work experience, his impairment prevents him from doing any other work available in the national economy.If the claimant cannot, he is found to be disabled.
In addition to these regulations, the Secretary issued a Social Security Ruling in 1982 (SSR 82-55) which instructs Social Security administrators not to consider the combined effects of impairments which do not individually meet the Secretary's "severity" standard. Accordingly, someone who suffers several impairments deemed non-severe will be denied benefits regardless of their combined effect. SSR 82-55 also lists 20 specific impairments which the Secretary has determined are nonsevere per se. Moreover, the ruling is binding on all Social Security Administration personnel, including administrative law judges and the Appeals Council, and was made effective retroactively to August 20, 1980.
The named plaintiffs were found "not disabled" under the severity regulation (the second step of the Secretary's sequential evaluation), and thus were denied benefits on the grounds that the medical evidence alone failed to establish the existence of an impairment which significantly limited their ability to perform basic work activities. A description of the cases of some of the named plaintiffs illustrates the operation of the Secretary's policies.
David Dixon suffers pain in his right hip from a serious fracture which he sustained in an automobile accident in 1969, and attends the Harlem Rehabilitation Center as an outpatient for six hours a day, five days a week.He is blind in one eye, (also as a result of the automobile accident) suffers from a personality disorder, and has a verbal I.Q. of 68. The Administrative Law Judge ("ALJ") found each of Dixon's impairments to be non-severe under the second step of the five-step disability analysis. As to the hip fracture, The ALJ found that if Dixon underwent "intensive therapy" he would "possibly enhance [sic] his current disability." Dixon's blindness in one eye was found not to be a severe impairment because he retained essentially normal sight in his other eye. As to Dixon's mental capacity and psychological problems, the ALJ stated that there was "a good possibility" that these problems would not prevent Dixon from working if he obtained "retraining and some program to help [him] with his motivation." Because the ALJ considered each impairment not to be severe based on the medical evidence, he did not consider (and, under the regulation, was not free to consider) whether Dixon was able to return to his last job (which had ended in 1974), or whether in view of Dixon's impairments and his age, education, and work experience, he was capable of performing any job in the national economy. There is no indication that the ALJ considered the combined effect of Dixon's impairments. The Appeals Council affirmed.
Joanne Lockett worked as an operator and supervisor for the telephone company for twenty years, until she suffered an acute onset of brain stem syndrome in October 1981. She has suffered, as the ALJ found, "severe neurological and psychological impairments" as a result, manifested in particular by substantial difficulty with memory. The ALJ found that Lockett was unable to return to her prior job, and that she was disabled from October 1981 to December 1982. However, he decided that she was no longer disabled as of December 1982 because at that time she began participating in a sheltered workshop at the Federation for the Handicapped. In the ALJ's view, this participation meant that
"her condition was no longer severe, in that it no longer significantly limited her ability to engage in basic work activities or work related functions, in terms of an ordinary work day on a regular and continuing day-to-basis [sic] in the competitive job market."
He held that, in view of this finding as to non-severity for the period beginning in December 1982, "it is not material whether the claimant was then able to sustain any of her past relevant work or any other work which exists in significant numbers in the national econony.
Her administrative appeal is pending.
Dominga Carrasquillo's impairments of hypertension, arthritis, chest pain, and pain in her lower extremities were all found to be non-severe in a very brief decision by the ALJ who presided at her hearing. Her impairments were not considered in combination. Carrasquillo was 59 years old at the time of her hearing, has a third grade education, is illiterate in English, and last worked in 1975 as a buttonhole maker in a factory. None of these factors was considered, however, because the ALJ found that her impairments did not meet the "severity" threshold on the basis of medical evidence alone.
Carrasquillo's administrative appeal is pending.
Ricardo Ramirez has suffered injuries to his back in two separate accidents, one in 1961 and one in 1979, and, as the ALJ found, "has a chronic lower back pain syndrome with degenerative changes at L5-S1 levels." His bending and straight leg lifting are limited to 30 and 20 degrees, respectively. Ramirez is also completely blind in his right eye. The ALJ found that Ramirez" impairments did not meet the severity requirement. Accordingly, the ALJ failed to perform any vocational analysis, noting specifically that under the regulations
"medical considerations alone can justify a finding that an individual is not under a disability where the medically determinable impairment is not severe without consideration of the vocational factors."
The ALJ did not consider the combined effect of Ramirez" impairments.Ramirez was 54 years old at the time of the hearing, with a high school education, and has not worked since his last accident.
The Appeals Council affirmed.
II. Motion for Preliminary Injunction
Preliminary relief is sought by those members of the proposed class whose benefits were terminated pursuant to the policies challenged in this action on or since July 20, 1983, at any stage of the administrative process, or who had challenges to such decisions pending on July 20, 1983, these class members all meet the Act's statute of limitations requiring that actions for judicial review of the Secretary's decision be filed within 60 days of the date of the decision.
However, the sub-class seeking preliminary relief includes claimants whose appeals before the Appeals Council were still pending and who therefore have not yet exhausted administrative remedies. Accordingly, we must consider the Secretary's argument that the Court is without jurisdiction over those claimants who have not yet exhausted their administrative remedies as required by Section 405(g).
As is often noted, the requirement of exhaustion of administrative remedies has a "waivable" and a "non-waivable" element. The non-waivable element requires that a plaintiff present his claim in some form to the Secretary. Full exhaustion of administrative remedies is, however, a "waivable" element. Mathews v. Eldridge, 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976). The non-waivable requirement has been satisfied here. All of the plaintiffs who move for preliminary relief have presented their claims, which have, in all cases, either been denied or terminated at some level of the administrative process. The Secretary's argument is directed to the requirement of full exhaustion, which may be waived by a court under certain circumstances:
"A waiver of the exhaustion requirement may b e inferred where the plaintiffs' legal claims are collateral to their demand for benefits, where exhaustion would be a pro forma or futile gesture, or where the harm suffered in the interim would be irreparable in the sense of that post hoc relief would be adequate."
Smith v. Schweiker, 709 F.2d 777, 780 (2d Cir. 1983), citing Mathews v. Eldridge, 424 U.S. at 330-31.
The Secretary contends that, under the analysis employed in Smith, plaintiffs do not satisfy the collaterality and futility grounds for waiver of exhaustion.
Even if the Secretary were correct as to those grounds, however, we believe that waiver of exhaustion is appropriate because plaintiffs have demonstrated that they will suffer irreparable harm for which post hoc relief would be inadequate. Unlike the Smith plaintiffs, who were all receiving disability benefits at the time of the lawsuit, none of the named plaintiffs in this case are receiving benefits. As their affidavits demonstrate, without benefits their respective financial situations are precarious.
Moreover, neither the ALJs nor the Appeals Council, of course, have the authority to declare the Secretary's severity standard unlawful, but instead are required to apply that standard (along with SSR 82-55) to each claim. In such circumstances, to require plaintiffs to pursue a process which will be guided by a procedure they claim is illegal, and which has already resulted in an initial denial of benefits, on the possibility that the claim will ultimately be disposed of on some other basis, is unwarranted, particularly since the legal issue raised here is not one which is likely to "benefit from further factual development and refinement through the administrative process." Heckler v. Lopez, 463 U.S. 1328, 104 S. Ct. 10, 15, 77 L. Ed. 2d 1431 (1983) (Rehnquist, J.) application to vacate stay denied, 464 U.S. 879, 104 S. Ct. 221, 78 L. Ed. 2d 217 ...