Smith v. Berryhill
Smith v. Berryhill
Opinion
*1771
The Social Security Act allows for judicial review of "any final decision ... made after a hearing" by the Social Security Administration (SSA).
I
A
Congress enacted the Social Security Act in 1935, responding to the crisis of the Great Depression.
In 1939, Congress amended the Act, adding various provisions that-subject to changes not at issue here-continue to govern cases like this one. See Social Security Act Amendments of 1939, ch. 666,
In 1940, the Social Security Board created the Appeals Council, giving it responsibility for overseeing and reviewing the decisions of the agency's hearing officers (who, today, are ALJs). 2 Though the Appeals Council originally had just three members, its ranks have since swelled to include over 100 individuals serving as either judges or officers. 3 The Appeals Council remains a creature of regulatory rather than statutory creation.
Today, the Social Security Act provides disability benefits under two programs, known by their statutory headings as Title II and Title XVI. See § 401
et seq.
(Title II); § 1381
et seq.
(Title XVI). Title II "provides old-age, survivor, and disability benefits to insured individuals irrespective of financial need."
Bowen v. Galbreath
,
Modern-day claimants must generally proceed through a four-step process before they can obtain review from a federal court. First, the claimant must seek an initial determination as to his eligibility. Second, the claimant must seek reconsideration of the initial determination. Third, the claimant must request a hearing, which is conducted by an ALJ. Fourth, the claimant must seek review of the ALJ's decision by the Appeals Council. See
The tension in this case stems from the deadlines that SSA regulations impose for seeking each successive stage of review. A party who seeks Appeals Council review, as relevant here, must file his request within 60 days of receiving the ALJ's ruling, unless he can show "good cause for missing the deadline." § 416.1468.
The Appeals Council's review is discretionary: It may deny even a timely request without issuing a decision. See § 416.1481. If a claimant misses the deadline and cannot show good cause, however, the Appeals Council does not deny the request but rather dismisses it. § 416.1471. Dismissals are "binding and not subject to further review" by the SSA. § 416.1472. The question here is whether a dismissal for untimeliness, after the claimant has had an ALJ hearing, is a "final decision ... made after a hearing" for *1773 purposes of allowing judicial review under § 405(g).
B
Petitioner Ricky Lee Smith applied for disability benefits under Title XVI in 2012. Smith's claim was denied at the initial-determination stage and upon reconsideration. Smith then requested an ALJ hearing, which the ALJ held in February 2014 before issuing a decision denying Smith's claim on the merits in March 2014.
The parties dispute what happened next. Smith's attorney says that he sent a letter requesting Appeals Council review in April 2014, well within the 60-day deadline. The SSA says that it has no record of receiving any such letter. In late September 2014, Smith's attorney sent a copy of the letter that he assertedly had mailed in April. The SSA, noting that it had no record of prior receipt, counted the date of the request as the day that it received the copy. The Appeals Council accordingly determined that Smith's submission was untimely, concluded that Smith lacked good cause for missing the deadline, and dismissed Smith's request for review.
Smith sought judicial review of that dismissal in the U.S. District Court for the Eastern District of Kentucky. The District Court held that it lacked jurisdiction to hear his suit. The U.S. Court of Appeals for the Sixth Circuit affirmed, maintaining that "an Appeals Council decision to refrain from considering an untimely petition for review is not a 'final decision' subject to judicial review in federal court."
Smith v. Commissioner of Social Security
,
Smith petitioned this Court for certiorari. Responding to Smith's petition, the Government stated that while the Sixth Circuit's decision accorded with the SSA's longstanding position, the Government had "reexamined the question and concluded that its prior position was incorrect." Brief for Respondent on Pet. for Cert. 15.
We granted certiorari to resolve a conflict among the Courts of Appeals. 586 U.S. ----,
II
Section 405(g), as noted above, provides for judicial review of "any final decision ... made after a hearing." This provision, the Court has explained, contains two separate elements: first, a "jurisdictional" requirement that claims be presented to the agency, and second, a "waivable ... requirement that the administrative remedies prescribed by the Secretary be exhausted."
Mathews v. Eldridge
,
The question here is whether a dismissal by the Appeals Council on timeliness grounds after a claimant has received an ALJ hearing on the merits qualifies as a "final decision ... made after a hearing" for purposes of allowing judicial review under § 405(g). In light of the text, the context, and the presumption in favor of the reviewability of agency action, we conclude that it does.
A
We begin with the text. Taking the first clause ("any final decision") first, we note that the phrase "final decision" clearly denotes some kind of terminal event,
8
and Congress' use of the word "any" suggests an intent to use that term "expansive[ly]," see
Ali v. Federal Bureau of Prisons
,
Turning to the second clause ("made after a hearing"), we note that this phrase has been the subject of some confusion over the years. On the one hand, the statute elsewhere repeatedly uses the word "hearing" to signify an ALJ hearing,
9
which suggests that, in the ordinary case, the phrase here too denotes an ALJ hearing. See,
e.g.
,
IBP
,
Inc.v.Alvarez
,
*1775 There is no need today to give § 405(g) a definition for all seasons, because, in any event, this is a mine-run case and Smith obtained the kind of hearing that § 405(g) most naturally suggests: an ALJ hearing on the merits. 10 In other words, even giving § 405(g) a relatively strict reading, Smith appears to satisfy its terms. 11
Smith cannot, however, satisfy § 405(g)'s "after a hearing" requirement as a matter of mere chronology.
12
In
Califano v. Sanders
,
Here, by contrast, the SSA's "final decision" is much more closely tethered to the relevant "hearing." Unlike a petition to reopen, a primary application for benefits may not be denied without an ALJ hearing (assuming the claimant timely requests one, as Smith did). § 405(b)(1). Moreover, the claimant's access to this first bite at the apple is indeed a matter of legislative right rather than agency grace. See
id
., at 108,
B
The statutory context weighs in Smith's favor as well. Appeals from SSA determinations are, by their nature, appeals from the action of a federal agency, and in the separate administrative-law context of the Administrative Procedure Act (APA), an action is "final" if it both (1) "mark[s] the 'consummation' of the agency's decisionmaking process" and (2) is "one by which 'rights or obligations have
*1776
been determined,' or from which 'legal consequences will flow.' "
Bennett v. Spear
,
To be clear, "the doctrine of administrative exhaustion should be applied with a regard for the particular administrative scheme at issue,"
Salfi
,
We note further that the SSA is a massive enterprise,
14
and mistakes will occur. See Brief for National Organization of Social Security Claimants' Representatives as
Amicus
Curiae
13 (collecting examples).
15
The four steps preceding judicial review, meanwhile, can drag on for years.
16
While mistakes by the agency may be admirably rare, we do not presume that Congress intended for this claimant-protective statute, see
City of New York
,
C
Smith's entitlement to judicial review is confirmed by "the strong presumption that Congress intends judicial review of administrative action."
Bowen v. Michigan Academy of Family Physicians
,
III
Amicus ' arguments to the contrary have aided our consideration of this case, but they have not dissuaded us from concluding that the Appeals Council's dismissal of Smith's claim satisfied § 405(g).
Amicus
first argues that the phrase "final decision ... made after a hearing" refers to a conclusive disposition, after exhaustion, of a benefits claim on the merits-that is, on a basis for which the Social Security Act entitles a claimant to a hearing. This reading follows,
amicus
argues, from the Court's observations that § 405(g) generally requires exhaustion, and moreover from
Sanders
' suggestion, see
We disagree. First, as noted above, the Court's precedents do not make exhaustion a pure necessity, indicating instead that while the SSA is empowered to define the steps claimants must generally take, the SSA is not also the unreviewable arbiter of whether a claimant has sufficiently complied with those steps. See supra , at 1773 - 1774, and n. 7. Second, the Appeals Council's dismissal is not merely collateral; such a dismissal calls an end to a proceeding in which a substantial factual record has already been developed and on which considerable resources have already been expended. See supra , at 1776, and n. 16. Accepting amicus ' argument would mean that a claimant could make it to the end of the SSA's process and then have judicial review precluded simply because the Appeals Council stamped "untimely" on the request, even if that designation were patently inaccurate. While there may be contexts in which the law is so unforgiving, this is not one. See supra , at 1775 - 1777.
Smith's case, as noted above, is also distinct from
Sanders
. See
supra
, at 1775.
Sanders
, after all, involved the SSA's denial of a petition for reopening-a second look that the agency had made available to
*1778
claimants as a matter of grace. See
Amicus
also emphasizes that the SSA handles a large volume of claims, such that a decision providing for greater judicial review could risk a flood of litigation. That result seems unlikely for a few reasons. First, the number of Appeals Council untimeliness dismissals is comparatively small-something on the order of 2,500 dismissals out of 160,000 dispositions per year.
18
Second, the interpretation that Smith and the Government urge has been the law since 1983 in the Eleventh Circuit, and the data there do not bear out
amicus
' warning. See Reply Brief for Respondent 14-15 (collecting statistics). Third, while
amicus
flags related contexts that could be informed by today's ruling, see Brief for Court-Appointed
Amicus
Curiae
36-40, those issues are not before us. We therefore do not address them other than to reinforce that such questions must be considered in the light of "the particular administrative scheme at issue." See
Salfi
,
Finally,
amicus
argues that the meaning of § 405(g) is ambiguous and that the SSA's longstanding interpretation of § 405(g) -prior to its changed position during the pendency of this case-is entitled to deference under
Chevron U.S. A. Inc. v. Natural Resources Defense Council, Inc.
,
We need not decide whether the statute is unambiguous or what to do with the curious situation of an
amicus curiae
seeking deference for an interpretation that the Government's briefing rejects.
Chevron
deference " 'is premised on the theory that a statute's ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.' "
Kingv.Burwell
, 576 U.S. ----, ----,
Indeed, roughly six years after
Chevron
was decided, the Court declined to give
Chevron
deference to the Secretary of Labor's interpretation of a federal statute that would have foreclosed private rights of action under certain circumstances. See
Adams Fruit Co. v. Barrett
,
IV
Although they agree that § 405(g) permits judicial review of the Appeals Council's dismissal in this case, Smith and the Government disagree somewhat about the scope of review on remand. 19 Smith argues that if a reviewing court disagrees with the procedural ground for dismissal, it can then proceed directly to the merits, while the Government argues that the proper step in such a case would be to remand. We largely agree with the Government.
To be sure, there would be jurisdiction for a federal court to proceed to the merits in the way that Smith avers. For one, as noted above, exhaustion itself is not a jurisdictional prerequisite. See
supra
, at 1773 - 1774. Moreover, § 405(g) states that a reviewing "court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner of Social Security, with or without remanding the cause for a rehearing"-a broad grant of authority that reflects the high "degree of direct interaction between a federal court and an administrative agency" envisioned by § 405(g).
Hudson
,
Fundamental principles of administrative law, however, teach that a federal court generally goes astray if it decides a question that has been delegated to an agency if that agency has not first had a chance to address the question. See,
e.g.
,
INS v. Orlando Ventura
,
V
We hold that where the SSA's Appeals Council has dismissed a request for review as untimely after a claimant has obtained a hearing from an ALJ on the merits, that dismissal qualifies as a "final decision ... made after a hearing" within the meaning of § 405(g). The judgment of the United States Court of Appeals for the Sixth Circuit is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
See Koch & Koplow, The Fourth Bite at the Apple: A Study of the Operation and Utility of the Social Security Administration's Appeals Council,
See id ., at 235.
SSA, Brief History and Current Information About the Appeals Council, https://www.ssa.gov/appeals/about_ac.html (all Internet materials as last visited May 22, 2019).
Because Smith seeks benefits under Title XVI, we cite to the regulations that govern Title XVI, which are located at 20 CFR pt. 416 (2018). The regulations that govern Title II are located at 20 CFR pt. 404.
Of course, if the result at any of the four preceding stages is fully favorable, there is generally no need to proceed further.
Seven Courts of Appeals have held that there is no judicial review under these circumstances, while two have held that there is. Compare
Brandtner v. Department of Health & Human Servs.
,
While
Califano v. Sanders
,
See 5 Oxford English Dictionary 920 (2d ed. 1989) (Final: "Marking the last stage of a process; leaving nothing to be looked for or expected; ultimate"); 4 Oxford English Dictionary 222 (1933) (same); see also Webster's New World College Dictionary 542 (5th ed. 2016) (Final: "leaving no further chance for action, discussion, or change; deciding; conclusive"); Merriam-Webster's Collegiate Dictionary 469 (11th ed. 2011) (Final: "coming at the end: being the last in a series, process, or progress").
See
We note as well that the "hearing" referred to in § 405(g) cannot be a hearing before the Appeals Council. Congress provided for a hearing in § 405(b) and for judicial review "after a hearing" in § 405(g) before the Appeals Council even existed. See
supra,
at 1771 - 1772. Moreover, the Appeals Council makes many decisions without a hearing-
e.g.,
denying a petition for review without giving reasons-that are nevertheless plainly reviewable. See
We return below to the possibility, suggested by amicus , that "final decision ... made after a hearing" could signify a final decision "on a matter on which the Act requires a hearing." Brief for Court-Appointed Amicus Curiae 13; see infra , at 1777- - 1778. Here, we note only that while Congress certainly could have written something like "final decision on the merits ... made after a hearing," it did not.
The alternative risks untenable breadth. The Battle of Yorktown predates our ruling today, but no one would describe today's opinion as a "decision made after the Battle of Yorktown." As we explain, however, the dismissal of Smith's claim is tethered to Smith's hearing in a way that more distant events are not.
The noteworthy counterpoint is § 405(h), which withdraws federal-court jurisdiction under
For example, the agency receives roughly 2.5 million new disability claims per year. See SSA, Annual Performance Report Fiscal Years 2017-2019, p. 32 (Feb. 12, 2018), https://www.ssa.gov/budget/FY19Files/2019APR.pdf.
See also Koch & Koplow 257 (noting that each Appeals Council member "typically spends only ten to fifteen minutes reviewing an average case" given "the pressures of the caseload").
See SSA, FY 2020 Congressional Justification 9 (Mar. 2019) (estimating 2019 average processing time for the first three steps at 113 days, 105 days, and 515 days, respectively), https://www.ssa.gov/budget/FY20Files/FY20-JEAC.pdf; Brief for National Organization of Social Security Claimants' Representatives as Amicus Curiae 11.
A different question would be presented by a claimant who assertedly faltered at an earlier step- e.g., whose request for an ALJ hearing was dismissed as untimely and who then appealed that determination to the Appeals Council before seeking judicial review. While such a claimant would not have received a "hearing" at all, the Court's precedents also make clear that a hearing is not always required. See supra, at 1773 - 1774. Because such a situation is not before us, we do not address it.
See Brief for Respondent 43, n. 17 (number of timeliness dismissals); SSA, Annual Statistical Supplement 2018 (Table 2.F11) (number of dispositions), https://www.ssa.gov/policy/docs/statcomps/supplement/ 2018/2f8-2f11.pdf.
The parties agree, as do we, on the standard of review: abuse of discretion as to the overall conclusion, and "substantial evidence" "as to any fact." See § 405(g) ; see also Brief for Respondent 43-44; Tr. of Oral Arg. 5; cf.
Bowen v. City of New York
,
We make no statement, by contrast, regarding the applicability of this line of cases to situations in which the Appeals Council has had a chance to address the merits. Cf.
Sims v. Apfel
,
By the same token, remand may be forgone in rarer cases, such as where the Government joins the claimant in asking the court to reach the merits or where remand would serve no meaningful purpose.
Reference
- Full Case Name
- Ricky Lee SMITH, Petitioner v. Nancy A. BERRYHILL, Acting Commissioner of Social Security
- Cited By
- 494 cases
- Status
- Published