AR 92-7(9): Gonzalez v. Sullivan, 914 F.2d 1197 (9th Cir. 1990) -- Effect of Initial Determination Notice Language on the Application of Administrative Finality -- Titles II and XVI of the Social Security Act.

ISSUE:

Whether an initial determination in the Social Security or Supplemental Security Income (SSI) programs must be reopened when the notice of the initial determination did not explicitly state that the failure to seek reconsideration results in a final determination, and the claimant did not pursue a timely appeal.

STATUTE/REGULATION/RULING CITATION:

Section 205(b)(1) of the Social Security Act (42 U.S.C. 405(b)(1)), 20 CFR 404.904, 404.905, 404.957(c)(1), 404.987, 404.988, 404.989, 416.1404, 416.1405, 416.1457(c)(1), 416.1487, 416.1488, 416.1489.

CIRCUIT:

Ninth (Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Northern Mariana Islands, Oregon, Washington) -- Gonzalez v. Sullivan, 914 F.2d 1197 (9th Cir. 1990)

APPLICABILITY OF RULING:

This Ruling applies to determinations or decisions on subsequent applications at all administrative levels (i.e., initial, reconsideration, administrative law judge hearing and Appeals Council).

DESCRIPTION OF CASE:

Mr. Gonzalez first applied for disability benefits on May 26, 1983, alleging that his disability began on March 8, 1982. In a notice dated July 27, 1983, the Secretary denied the application. The notice stated that:

: If you believe that this determination is not correct, you may request that your case be reexamined. If you want this reconsideration, you must request it not later than 60 days from the date you receive this notice. You may make your request through any social security office. If additional evidence is available, you should submit it with your request. Please read the enclosed leaflet for a full explanation of your right to question the determination made on your claim.
: If you do not request reconsideration of your case within the prescribed time period, you still have the right to file another application at any time.

On October 24, 1984, Mr. Gonzalez reapplied for disability benefits, once again alleging that he had been disabled since March 8, 1982. After a hearing, an Administrative Law Judge denied the plaintiff's application. The decision stated, in relevant part, that the issue of disability was res judicata through July 27, 1983, the date of the initial denial on the previous application. The Administrative Law Judge also did not reopen the determination on the claimant's previous application. The Administrative Law Judge's decision became the final decision of the Secretary for the period after July 27, 1983. Mr. Gonzalez appealed to district court. After the district court found that substantial evidence supported the Secretary's decision, Mr. Gonzalez appealed to the United States Court of Appeals for the Ninth Circuit. On appeal to the Ninth Circuit, the claimant raised, for the first time, the issue of the sufficiency of the notice of the initial determination on his first application.

HOLDING:

The Ninth Circuit held that the notice given in the determination on the first application violates a claimant's fifth amendment right to procedural due process. In addition, the court stated that:

: Moreover, the form of the notice used here is sufficiently misleading that it introduces a high risk of error into the disability decisionmaking process. . . . One of the fundamental requirements of procedural due process is that a notice must be reasonably calculated to afford parties their right to present objections. . . . The notice given in this case does not clearly indicate that if no request for reconsideration is made, the determination is final.

Statement As To How Gonzalez Differs From Social Security Policy

It is SSA's policy to issue notices that provide claimants procedural due process. SSA believes that the notices of initial determination used in the past have done that. The notice and the enclosed leaflet explained the claimant's rights and the result of not appealing the determination.

The notice language at issue in Gonzalez was revised in 1989 to explain more clearly the difference between appealing a determination, which prevents the determination from becoming final, and filing a new application. SSA completed implementation of the 1989 notice language change in February 1990. SSA is further revising that language in accordance with section 5107 of the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508 (OBRA '90). The statute provides that determinations made on or after July 1, 1991, may not be given res judicata effect if the claimant demonstrates that he/she failed to appeal the determination "acting in good faith reliance upon incorrect, incomplete, or misleading information, relating to the consequences of reapplying for benefits in lieu of seeking review of an adverse determination, provided by any officer or employee" of the SSA or a State agency making determinations for the Secretary.

As stated above, the Ninth Circuit Court of Appeals has found that the Secretary's former notice language resulted in a denial of due process.

Explanation Of How SSA Will Apply The Decision Within The Circuit

This Ruling applies only to cases involving claimants who: (1) reside in Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Northern Mariana Islands, Oregon, or Washington; and (2) received an adverse initial determination made prior to July 1, 1991; and (3) did not timely appeal that determination. Claimants who file new claims after receiving notices of initial determinations made on or after July 1, 1991 are protected by the provisions of OBRA '90 as explained above. SSA will apply this Ruling in adjudicating a subsequent application at the initial, reconsideration, Administrative Law Judge, or Appeals Council levels.

A new determination based on the merits of the claim must be issued and a notice of the determination must be sent to the claimant in accordance with 20 CFR 404.992 or 416.1492 if:

the claimant received a notice like that received by Mr. Gonzalez, as described above; and
the claimant files a subsequent application; and
the claimant either requests reopening of the prior initial determination or requests some or all of the benefits claimed in the prior application.

For purposes of this Ruling, the time limits for reopening and revising final agency determinations do not apply.

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