The opinion of the court was delivered by: LEONARD B. SAND
On June 18, 1992, pursuant to a notice adequately disseminated to the class, this Court held a hearing on the proposed settlement set forth herein. No one appeared in opposition to the proposed settlement. The Court stated its view that the settlement is in all respects fair and appropriate and that the compromises represented therein constitute a reasonable balance, especially bearing in mind the length of time that would elapse, absent a settlement, before any concrete benefits could be delivered to any class member and the costs and complexity of implementing a settlement which followed literally the contours of the Court's liability determinations. The Court further found to be reasonable the cut-off dates set forth in the settlement and the existence of a sunset provision. The Court entered the Judgment approving the Settlement Agreement set forth in Appendix A below.
Dated: June 22, 1992, New York, New York
WHEREAS, an amended class action complaint was filed on August 3, 1984, and
WHEREAS, a plaintiff class was certified on August 19, 1985, and subsequently modified on December 20, 1985, and is now defined as
All New York residents whose claims for benefits or continuation of benefits have been, or will be denied or terminated since October 1, 1981, based on a determination that they do not have a disability that prevents them from engaging in substantial gainful activity and whose benefits have not been granted or restored through subsequent appeals
WHEREAS, the parties wish to avoid further litigation in this matter,
THEREFORE, all parties to this civil action by their undersigned counsel, hereby agree, subject to the approval of the court, to the settlement of plaintiffs' claims in this litigation, in accordance with the following terms and conditions:
1. Definitions that apply to this Settlement.
(a) Disability Benefits -- Benefits provided by the Social Security Administration pursuant to Titles II and XVI of the Social Security Act for persons who meet the definition of disability contained therein.
(b) Social Security Administration ("SSA") -- The Federal agency that is responsible for deciding claims for disability benefits. SSA includes the Office of Hearings and Appeals ("OHA") that decides such claims at the Administrative Law Judge ("ALJ") and Appeals Council levels of administrative review, and components that supervise and review the adjudication of claims by the Office of Disability Determinations. SSA also includes various offices which employ disability examiners.
(c) Office of Disability Determinations ("ODD") -- The state agency that decides disability claims in the State of New York at the initial and reconsideration levels of administrative review on behalf of SSA pursuant to 20 C.F.R. §§ 404.1600 ff; 416.1000 ff.
(d) Decisionmakers -- SSA and ODD personnel who decide disability benefit claims of New York State residents under 20 C.F.R. Part 404, Subpart P; Part 416, Subpart I.
(e) Reviewers of decisions -- SSA and ODD personnel who conduct quality assurance, pre-effectuation or other reviews of determinations on disbility claims of New York State residents.
(f) Second Circuit disability decisions -- Decisions of the United States Court of Appeals for the Second Circuit in which the Secretary of HHS is a party that are or will be published, that address the issue of whether an individual, or individuals is or are disabled within the meaning of 42 U.S.C. §§ 423(d), 1382(c) or that address the standards or procedures for making such determinations. Pursuant to this definition the following decisions are among those not considered "Second Circuit disability decisions:" Gutierrez v. Bowen, 898 F.2d 307 (2d Cir. 1990) Valente v. Sullivan ("Valente II"), 897 F.2d 54 (2d Cir. 1990); Barone v. Bowen, 869 F.2d 49 (2d Cir. 1989); Conley v. Bowen, 859 F.2d 261 (2d Cir. 1988); DeRienzis v. Heckler, 748 F.2d 352 (2d Cir. 1984); Matsibekker v. Heckler, 738 F.2d 79 (2d Cir. 1985); Valente v. Sec. of Health and Human Services, 733 F.2d 1037 (2d Cir. 1984); Delamater v. Schweiker, 721 F.2d 750 (2d Cir. 1983); Dietsch v. Schweiker, 700 F.2d 869 (2d Cir. 1983).
(g) Date of settlement - Date on which this settlement is entered by the Court.
(h) Computation of time - Time periods under this agreement: (i) exclude the day of the event from which the time period runs; (ii) for time periods of less than 11 days, exclude any day that an office that is responsible for taking the action under this agreement during the time period is closed for business (e.g., Saturday, Sunday, legal holiday, or due to weather or other emergency); and (iii) if such an office is closed on the date an action under this agreement is due, such action shall be due the next day the office is open for business.
2. SSA shall direct all decisionmakers and reviewers of decisions to comply with holdings in Second Circuit disability decisions in adjudicating or reviewing claims for disability benefits in accordance with the provisions of this settlement agreement.
4. (a) SSA shall provide each office of decisionmakers and reviewers of decisions with a copy of this settlement agreement.
(b) SSA shall provide a Manual of Second Circuit Disability Decisions ("Manual") to all decisionmakers and reviewers of decisions. The Manual shall contain statements of the principal holdings of Second Circuit disability decisions issued before the date of settlement. The Manual need not describe each Second Circuit disability decision issued before the date of settlement but must state principal holdings that address whether an individual or individuals is or are disabled within the meaning of 42 U.S.C. §§ 423(d) or 1382(c) or the procedures and standards for making such determinations.
(c) The parties agree that the statements of the holdings of Second Circuit disability decisions set forth in the Manual are good faith interpretations of the court's holdings. However, the parties do not stipulate that these statements are complete, or that they are the correct interpretations of Second Circuit disability decisions.
(d) Following issuance of the Manual, SSA may, but is not required by this settlement agreement to, issue instructions with respect to any Second Circuit disability decision issued before the date of settlement. The provisions of subparagraphs 5(c) and 5(d) (with the exception of the first sentence of subparagraph 5(c)) apply to such instructions.
(e) SSA shall add in a prominent location at the beginning of the section of the Circuit Court Case Guide in HALLEX that discusses caselaw of the Second Circuit the following text: "Adjudicators of disability claims of New York State residents involving medical or vocational issues are reminded that they are required to apply the controlling Second Circuit holdings set forth in the Manual of Second Circuit Disability Decisions attached to the instructions for implementing the Stieberger court-approved settlement." SSA shall also add this same text to the other sections of the HALLEX that discuss caselaw of the Second Circuit, including: (i) HALLEX I-3-390, Exhibit 1 ("Citation Guide Circuit Court Cases for Citation"). The Manual shall be available for inspection and copying by the public in SSA field and hearing offices in New York.
(f) SSA may remove the instruction in the Manual concerning Schisler v. Sullivan at such time as the instruction is rescinded due to the modification, stay, or vacatur of the order in Schisler v. Sullivan, dated October 25, 1991, or other event that operates to rescind the instruction. The inclusion of the instruction concerning Schisler does not constitute an admission of any kind by SSA and is without prejudice to any claim, defense, or other contention that SSA may assert or raise in any other action.
5. SSA shall use the following procedures with respect to Second Circuit disability decisions rendered after the date of settlement:
(a) SSA shall require each office of decisionmakers and reviewers of decisions to maintain a volume containing copies of all Second Circuit disability decisions that are issued after the date of settlement. SSA shall provide each office of decisionmakers and reviewers of decisions with a copy of each Second Circuit disability decision promptly after it is issued by the Court for inclusion in the volume. The volume shall be readily accessible to decisionmakers and reviewers of decisions in each office.
(c) If SSA distributes a decision pursuant to subparagraph 5(b) without an instruction, then within 90 days after the Second Circuit issues a mandate in a case or designates an opinion for publication, whichever is later, SSA will issue a written instruction to decisionmakers and reviewers of decisions at the initial and reconsideration levels regarding application of the holding of the Second Circuit disability decision. SSA may, but need not, issue such instructions to decisionmakers and reviewers of decisions in OHA. Once SSA has issued an instruction, it may at any subsequent time issue further instructions. If SSA determines that a holding of a Second Circuit disability decision has become obsolete (lacking in any precedential force at all, e.g., overruled by the Supreme Court, by the Second Circuit or by statute) SSA may issue written instructions to decisionmakers and reviewers of decisions stating the good faith basis of this determination and instructing them accordingly. SSA shall send any such instructions to five individuals or other entities specified on a list which plaintiffs' counsel will provide to defendants' counsel. Plaintiffs' counsel may periodically have the list revised or updated upon request communicated by plaintiffs' counsel to defendants' counsel. All instructions shall be issued for inclusion in the Manual described in subparagraph 4(b).
(d) This agreement does not mandate minimum standards of sufficiency or accuracy for instructions issued pursuant to this paragraph. However, this agreement does mandate that instructions issued pursuant to this paragraph shall be based on good faith interpretations of disability decisions. This agreement does not preclude any claims brought in another action challenging the sufficiency or accuracy of such instructions, other than claims that the instructions are not based on good faith interpretations of disability decisions, nor does this agreement authorize such challenges or imply an agreement that such challenges may be maintained.
(e)(1) If any party to an action decided by the Second Circuit seeks further review of the decision, either through a petition for rehearing or certiorari, or at any point when such a petition would be timely, SSA may issue written instructions to decisionmakers and reviewers of decisions not to apply some or all holdings stated in the decision and may rescind any instruction issued under subparagraphs 5(b) or (c) regarding that decision. The time period in which to issue instructions pursuant to subparagraph 5(c) regarding that decision shall be tolled for any period in which an instruction not to apply a Second Circuit holding issued pursuant to this subparagraph is in effect.
(2) In the event that instructions are issued pursuant to subparagraph 5(e)(1) not to apply a holding of a Second Circuit disability decision and neither a petition for rehearing nor a petition for certiorari is granted, then, within ten days from the date the Second Circuit decision is no longer subject to further review through rehearing or certiorari, SSA shall, by teletype or other written instruction, rescind any instructions that were issued pursuant to subparagraph 5(e)(1).
(4) When SSA issues a subparagraph 5(e)(1) instruction not to apply a holding of a Second Circuit disability decision, the instruction shall identify the issues addressed by the holding, and shall instruct each office of decisionmakers and reviewers of decisions to list any cases that might be affected if the holding were to be applied. In addition, the notice denying or partially denying any such claim will include the notice language stated in paragraph D.2 of Attachment 1. After a subparagraph 5(e)(1) instruction is rescinded, the responsible decisionmaking components shall promptly review the listed decisions as well as the decision of any unlisted claimant who shows that his or her claims decision made after the effective date of the subparagraph 5(e)(1) instruction may have been affected by application of the final court decision. Such reviews shall apply the final court decision unless it is inapplicable and shall assess disability for the time period covered by the claims decision under review unless the application of the final court decision requires development of the evidence; when development of the evidence is required, the review shall also assess current disability. Each claimant may appeal the decision made on his or her claim after such review. However, if review results in the determination that the final court decision is inapplicable to the claimant's case, the claimant may only appeal the issue of whether or not the final court decision is applicable to the claimant's case. This paragraph does not waive or foreclose any appeal rights that any claimant may have apart from the review provided for by this paragraph. SSA need not review any cases pursuant to this subparagraph in order to apply holdings of the Second Circuit to the extent that the holdings have been superseded by the Supreme Court or by the Second Circuit on rehearing.
(5) Any instructions issued pursuant to subparagraph 5(e)(1) and any modification or rescission of such instructions issued pursuant to subparagraphs 5(e)(2) and (3) shall be published in the Federal Register.
6. SSA shall rescind, insofar as applicable to claims of New York State residents for disability benefits, all written, oral, or computer-based instructions, policies, procedures, and rulings, other than regulations, (if any) to the extent that such directives state: (a) a general policy of nonacquiescence; (b) that the Secretary's decisionmakers and reviewers of decisions are bound only by rulings of the United States Supreme Court; (c) that decisionmakers and reviewers of decision shall not follow the law of the courts of appeals where the courts' holdings are in disagreement with the Secretary's interpretation of Titles II or XVI of the Social Security Act or the Secretary's implementation thereof; (d) that the Secretary's decisionmakers and reviewers of decisions are not to consider a decision of a court of appeals to be binding absent adoption of the holding in an acquiescence ruling; (e) that decisions of the courts of appeals apply only in a specific case in which a court of appeals ruling was rendered; or to the extent that such directives are inconsistent with the terms of this settlement. SSA shall instruct all decisionmakers and reviewers of decisions that any regulations are not to be applied to the extent that they contain statements or policies described in this paragraph. This paragraph does not require the Secretary of HHS to repeal 20 C.F.R. §§ 404.985, 416.1485.
(b) This paragraph shall not apply in any of the following circumstances:
(1) the class member was not a resident of New York State at the time of the prior administrative determination;
(2) an action for judicial review or administrative appeal of the prior determination was filed or would be timely on or after the date of issuance of Attachment 1;
(3) the issue as to which preclusion applies concerns any issue other than medical or vocational issues, such as the assets, income, quarters of coverage, earnings of the claimant, fraud, or whether the claimant had engaged in substantial gainful activity ("SGA").
8. Those class members who meet the following criteria will have an opportunity to have their cases reopened in accordance with paragraphs 9 and 10:
(a) The class member had a disability claim denied or terminated between October 1, 1981, and the date of issuance of Attachment 1 on the ground that the class member was not, or was no longer, disabled (denials or terminations for fraud, quarters of coverage, excess income or resources, earnings at the SGA level, or for other reasons unrelated to disability are not included); and
(b) The class member was a New York State resident at the time of the denial or termination; and
(c) The class member had a disability claim denied or terminated,
(i) at any level of administrative review between October 1, 1981, and October 17, 1985, inclusive; or
(ii) at the ALJ or Appeals Council level between October 18, 1985, and the date SSA issues Attachment 1, inclusive.
9. (a) SSA shall identify class members who, on the basis of data available in SSA's data processing systems are potentially within the portion of the class described in paragraph 8. SSA shall identify class members by name, Social Security Number ("SSN") or claim number (or both where available), and last known address and shall make good faith efforts to complete identification within 120 days after the date of settlement. SSA shall notify plaintiffs' counsel, within 90 days after the date of settlement, of the status of the identification process. If SSA does not expect to complete identification within the 120-day period, it shall provide class counsel a schedule for completion. Upon completion of identification, SSA shall provide plaintiffs' counsel with two lists of the persons identified as class members: (1) one alphabetical, by last name, (2) one by zip code. The lists will set forth each person's name, SSN or claim number (or both where available), and most current address available to the Social Security Administration. The lists may be supplied on computer disk or other method agreed to by the parties.
(b) SSA shall send individual notice (Attachment 2) by first-class mail to the last known address of the individuals identified pursuant to subparagraph 9(a). Within 120 days of identification, SSA shall mail the notices to all individuals who are scheduled to receive notice under this settlement. The notice shall state that the individual may be entitled to reopening of his or her claim for benefits, and that, in order to request reopening the individual should mail an enclosed, postage pre-paid, pre-addressed form to SSA. The notice shall also state that the individual may request assistance at any field office ("FO") within New York State.
(c) Individuals who receive the notice referred to in subparagraph 9(b) shall have 180 days from receipt within which to respond to the notice. The date the individual receives the notice will be deemed to be five days after the date on the notice, unless the individual shows that he or she did not receive it within the five-day period. If an individual who received an individual notice does not respond within 180 days of receipt, his or her disability claim will not be considered for reopening under this settlement agreement absent a finding of "good cause," as defined in 20 C.F.R. §§ 404.911; 416.1411.
(e) SSA shall maintain a computerized tracking system that records the name and address of each person who requests reopening by returning the form enclosed with the individual notice (Attachment 2) and the date the request was received by SSA. SSA shall enter the same information into the tracking system for other requests for review as such information is received by SSA's central office. SSA will provide information reasonably available from this tracking system on request by plaintiffs' counsel.
(f) (1) After a request for reopening is received by SSA, SSA will provide the person who requests reopening ("requester") with a written acknowledgment that a request for reopening was received. Unless the acknowledgment states the date of the request or, pursuant to subparagraph 9(f)(2) states that the timeliness of the request is disputed or uncertain, the request shall be deemed timely.
(2) If it appears to SSA that the request for reopening may be untimely, SSA will state in the acknowledgment (a) that the timeliness of the request is uncertain or disputed by SSA, and (b) either the date on which the request was received or that the request was received on or after a date certain that is at least 240 days after the date on which SSA sent the notice to which the requester is responding.
(3) SSA shall make good faith efforts to provide the acknowledgment within 30 days of SSA's receipt of the request. For individuals who request reopening in person, SSA shall, at the time of the request, provide either (a) the acknowledgment contemplated in this paragraph, or (b) other written, dated substantiation that the request was made.
(g) A class member's request for reopening of his or her claim shall constitute a request for reopening of all of his or her claims subject to reopening under this agreement. Class members' responses to individual notices shall be construed by SSA to be requests for reopening where the class member's intention is ambiguous or unclear.
(h) SSA will determine whether each requester meets the criteria in paragraph 8 and has properly requested reopening in accordance with subparagraphs 9(c), (d), and (g). SSA shall make this determination within a reasonable time.
(1) If SSA determines that a requester does not meet the criteria in paragraph 8 or has not properly requested reopening in accordance with subparagraphs 9(c), (d), and (g), SSA will send a notice of the determination to the requester. The notice will state the reasons for SSA's determination and explain that: (a) the requester will have 60 days from receipt of the notice to notify in writing the Office of the General Counsel ("OGC"), Department of Health and Human Services, Altmeyer Building, Room 600, 6401 Security Boulevard, Baltimore, Maryland 21235, that he or she disagrees with the determination; (b) the requester may request inspection of his or her administrative record upon which the determination was based and, as needed, the relevant claims file; and, (c) the requester will have 45 days to inspect the record at an SSA office mutually agreeable to the parties once the requester is notified that the record is available for inspection. If the requester does not notify OGC in writing that he or she disagrees with the determination within 60 days of receipt of the notice, the determination shall become final and shall not be subject to further review absent a finding of good cause, as defined in 20 C.F.R. §§ 404.911, 416.1411. For purposes of this subparagraph only, SSA district and branch offices will accept on behalf of OGC a requester's written notification of disagreement with the determination.
(2) OGC will attempt to resolve through negotiation all disputes concerning the determinations made pursuant to this subparagraph. OGC shall apprise class counsel of all such disputes, and class counsel shall make good faith efforts to assist in resolving such disputes. To further such resolution of disputes, class counsel shall be allowed to inspect the administrative record on which the decision was based and, as needed, the relevant claims file, if so requested, without regard to whether the requester made such a request in response to a notice sent pursuant to subparagraph 9(h)(1). If the requester has made such a request, OGC may arrange for the requester and class counsel to make such inspection concurrently. If the parties cannot resolve the question of a requester's entitlement to relief through negotiation, OGC will confirm to the requester and class counsel, in a written notice, that the dispute cannot be resolved. This notice shall be sent within a reasonable time. The notice will state that if within 60 days of receipt of OGC's written confirmation, the requester does not request the district court's review of the determination, the determination will become final and not subject to further review. The requester or class counsel may request the district court's review by filing a "Notice of Challenge to Decision Denying Reopening Under Stieberger v. Sullivan " with the district court in this action. Such a notice may be filed no later than 60 days after receipt of OGC's confirmation that the dispute cannot be resolved. Upon filing of such a notice, SSA shall file such agency records as the Court determines relevant to resolution of the dispute. Disputes under this paragraph that are submitted to the Court pursuant to paragraph 19 may be referred to a magistrate judge.
(3) For purposes of this subparagraph 9(h), the date of receipt of a notice will be deemed to be five days after the date on the notice, unless the requester shows that he or she did not receive it within the five-day period.
(i) When individual notices are returned as undeliverable, SSA will attempt to obtain updated addresses by providing a computer tape to the New York State Department of Social Services and the New York City Human Resources Administration for the sole purpose of obtaining addresses through a computerized match with public assistance, food stamp, and/or other relevant records. SSA's attempt to obtain updated addresses is subject to the requirements of the Privacy Act, as amended by the Computer Matching and Privacy Protection Act, 5 U.S.C. § 552a ("Privacy Act"). SSA shall not be obligated to bring legal proceedings to gain access to such data system records. SSA shall mail notices to potential class members for whom new addresses are provided. SSA shall identify for class counsel all potential class members for whom it did not obtain new addresses, and shall also identify for class counsel such potential class members whose notices were returned as undeliverable after the mailing to the new addresses. The information shall be provided in increments as it becomes available to SSA. Plaintiffs' counsel shall have 180 days after receipt of this information to furnish current addresses for such individuals. Upon timely receipt of such addresses from plaintiffs' counsel, SSA will mail a final notice to potential class members.
10. After a class member described in paragraph 8 requests reopening under paragraph 9 and is determined to meet the criteria in paragraphs 8 and 9, SSA will provide relief as explained in this paragraph. In adjudicating reopened claims, SSA shall require its decisionmakers and reviewers of decisions to apply the holdings in Second Circuit disability decisions in accordance with the provisions set forth in this settlement agreement, including the instruction set forth as Attachment 1. SSA shall require the ...