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ROONEY v. SHALALA

March 8, 1995

IRENE ROONEY, Plaintiff, against DONNA E. SHALALA, Secretary of Health and Human Services, Defendant.


The opinion of the court was delivered by: DAVID G. TRAGER

 TRAGER, District Judge:

 This social security appeal raises two legal issues: first, whether the Administrative Law Judge (ALJ) improperly refused to reopen two denials of benefits and, if so, whether plaintiff was so prejudiced by this failure to reopen that she is entitled to an immediate award of benefits.

 Background

 Plaintiff, Irene Rooney, is a fifty-nine-year-old woman who left school when she was sixteen to work for Ohrbach's Department Store. She was a reliable employee for thirty-three uninterrupted years. Mrs. Rooney now suffers from a long list of disabilities. She contracted benign oral cancer in 1980, necessitating multiple surgical procedures. She has a progressive asthmatic disorder, chronic obstructive pulmonary disease and bronchitis, as well as arrhythmia and thyroid disfunction. In 1982, a virus left her blind in one eye. She has difficulty walking due to degenerative disc disease, sciatica, chronic spinal strain, and neural narrowing and osteoarthritis of the right knee. Her combined disabilities cause the plaintiff considerable pain.

 In 1984, Mrs. Rooney's physical impairments made it impossible for her to continue her work as a sales manager. She was unable to perform the requisite standing, lifting, and walking. Despite her partial blindness, Ohrbach's did its best to accommodate a loyal employee by allowing her to stay on for a year under the title of auditor. While this kept her off her feet, her lack of training for the position, her inability to sit for any length of time, and her blindness made the accommodation unsuccessful.

 
If you do not request a hearing of your case within the prescribed time period, you still have the right to file another application at any time.

 Nothing in the Notice alerted the plaintiff to the fact that failure to file an appeal would mean a permanent loss of the opportunity to claim substantial benefits which might rightfully be hers. Indeed, the Notice seemed to imply that appealing and filing a new application were equivalent procedures.

 From 1987 until 1992, Mrs. Rooney attempted to negotiate the Social Security Act pro se with disastrous results. Due to the misleading Notice, she was unaware that reapplication was not the same as requesting a hearing. Believing the two procedures to be equivalent, she filed a new application in October of 1988. This time, however, she alleged the onset of her disability as March 19, 1988, because HHS personnel had told her that the determination of her initial claim was by law afforded res judicata effect and that there was nothing she could do to alter the agency's finding that she was not disabled during the period preceding the date of denial. March 19, 1988, was the first day following the period that was precluded by her initial, failed application.

 Mrs. Rooney's second application, filed in October of 1988 was also denied, on December 30, 1988. She received the same Notice and the same advice from Social Security personnel. At no time was she advised that failing to appeal meant giving up the opportunity for a hearing and substantive entitlements.

 On February 28, 1991, plaintiff made her third application, now claiming an onset date of December 31, 1988, the day following the denial of her second application. This third application was also denied in November of 1991, but by this time HHS had amended its Notice of Reconsideration to explicitly set forth the critical information, missing from the earlier form, concerning the adverse effect of failing to appeal. The new paragraph four reads:

 
You have the right to file a new application at any time, but filing a new application is not the same as appealing this decision. You might lose benefits if you file a new application instead of filing an appeal. Therefore, if you think this decision is wrong, you should ask for an appeal within 60 days.

 By this time proceeding with the aid of counsel, Mrs. Rooney finally requested and received a hearing before an ALJ, during which she sought a reopening of the first two denials. Counsel attempted to explain how the faulty Notice and agency advice had led the plaintiff to file successive applications, rather than appeal the original denial. The transcript reveals the ALJ's refusal to pursue this issue (Tr. 32-34). The ALJ simply interviewed the plaintiff and looked over the medical evidence in her file. He concluded that Mrs. Rooney was disabled, but only as of October 9, 1991. Since her insured status had expired in March of 1991, seven months before this ostensible "onset of disability," he found that she was not entitled to disability benefits. The Appeals Council declined to review the ALJ's decision. Plaintiff then appealed to this court. Currently before the Court are plaintiff's and defendant's cross-motions for judgment on the pleadings.

 Discussion

 A claim of entitlement to social security benefits triggers due process protections. Mathews v. Eldridge, 424 U.S. 319, 332-33, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976). There is a significant property interest in the fair adjudication of a claimant's eligibility to receive disability benefits. See Wright v. Califano, 587 F.2d 345, 354-56 (7th Cir. 1978). Due process requires that the Secretary give claimants notice reasonably calculated to apprise them of the pendency of action which may permanently affect their rights, and an opportunity to present their objections to that action. Day v. Shalala, 23 F.3d 1052, 1064-66 (6th Cir. 1994). See also Memphis Light, Gas and Water Div. v. Craft, 436 U.S. 1, 13, 56 L. Ed. 2d 30, 98 S. Ct. 1554 (1978) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 94 L. Ed. 865, 70 S. Ct. 652 (1950).

 The Secretary's first two reconsideration Notices, as outlined above, failed to give Mrs. Rooney adequate notice of the consequences of neglecting to ask for a hearing. In Gonzalez v. Sullivan, 914 F.2d 1197 (9th Cir. 1990), the Ninth Circuit found the 1983 version of the Secretary's denial Notice violated a claimant's fifth amendment right to procedural due process, noting that District Courts considering the issue had uniformly found the Notice inadequate. The cases the Gonzalez court relied upon for this proposition, Christopher v. Secretary of Health and Human Serv., 702 F. Supp. 41, 43 (N.D.N.Y. 1989); Butland v. Bowen, 673 F. Supp. 638, 640-42 (D. Mass. 1987); Dealy v. Heckler, 616 F. Supp. 880, 884-87 (W.D. Mo. 1984), were cited with approval by the Sixth Circuit in Day. Accord Penner v. Schweiker, 701 F.2d 256, 259-61 (3rd Cir. 1983); Aponte v. Sullivan, 823 F. Supp. 277, 282 (E.D. Pa. 1983).

 The Secretary acknowledges in this proceeding that the Notice in Gonzalez was constitutionally inadequate. She argues, however, that "the substance of the notice provided to claimant in that case . . . is not the same notice provided to plaintiff in this case." Def's Mem. Opp'n Mot. J. Plead. at 36. Despite the Secretary's arguments to the contrary, the notice sent to Mrs. Rooney is identical in every material respect to the ones found ...


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