Statement by Arthur J. Fried,
Office of the General Cousel, Social Security Administration
before the Senate Judiciary Committee
Subcommittee on Administrative Oversight and the Courts
June 15, 1998
Mr . Chairman and Members of the Subcommittee:
I am pleased to be here to discuss the Social Security Administration' s (SSA) policy for acquiescing in Federal circuit court decisions that conflict with our national policy. As you may be aware , last month we published revised regulations to ensure that such circuit court cases are uniformly applied as soon as possible when we decide claims within the applicable circuit.
I would like to emphasize that SSA has a longstanding tradition of providing all claimants with fair and impartial treatment under the law, and never ignores circuit decisions. When a U.S. Circuit Court of Appeals issues a decision on a claim for Social Security benefits, or Supplemental Security Income (SSI) payments, and that decision conflicts with our interpretation of the statute and regulations, we either issue an acquiescence ruling , change our national rules or, in rare cases, seek review by the Supreme Court. Our new regulations will help us issue acquiescence rulings more quickly and identify the cases of our claimants who may be affected by the ruling as soon as possible.
Today I would like to describe the current appeals process, our new acquiescence regulations, and our views on pending legislation in this area.
Administrative Appeals Process
A person who is dissatisfied with an initial determination made by SSA may pursue an appeal through three administrative levels and the Federal courts. The Social Security Act requires the Commissioner to provide a claimant the opportunity for a due process hearing, and allows for filing of a civil suit in Federa l court after the Commissioner 's final decision. SSA has also provided a reconsideration review--in disability cases, these are performed by the State Disability Determination Service (DDS)--prior to the hearing and a final review after the hearing by SSA's Appeals Council.
Reconsideration is the first administrative review for claimants and is a de novo (fresh) review of the claim (including any new evidence) by individuals (at the DDS in disability cases) who did not participate in the original decision. The reviewers consider all of the evidence and issue a reconsideration decision.
The second level of administrative appeal is a de novo hearing before an ALJ who can call on experts such as medical consultants, if needed, to help evaluate the evidence. Usually the claimant will obtain legal representation at this point. Frequently new evidence is introduced by the claimant and his or her representative, often at the hearing itself. Claimants are allowed to appear before the ALJ in person and to call witnesses.
The final administrative appeal level is the Appeals Council (a group of 24 administrative appeals judges), which may grant, deny, or dismiss a request for review of the AU decision. It will grant review if the ALJ decision contains an error of law, is not supported by substantial evidence, involves a broad policy issue, or there appears to be an abuse of discretion by the ALJ. After an Appeals Council action, if the claimant is still dissatisfied, the next step is filing a civil action in Federal court.
Appeals to Federal Court
Only a small number of claims are pursued to Federal court and in most of those SSA' s decision is upheld. The overwhelming majority--about 97 percent--of Social Security and SSI cases appealed to the Federal courts are based on the issue of entitlement to disability benefits. In FY 1997, 12,610 complaints were filed against SSA in the district courts. Of the 5,093 district court decisions rendered in FY 1997, only 539--just over 10 percent-reversed SSA's decision. Once the district court renders its decision, both SSA and the claimant have 60 days to appeal to the U.S. Circuit Court.
Only a small number of the cases affirmed by the district court are appealed to the circuit courts and the Agency's position is upheld in the overwhelming majority of cases. Of the 514 circuit court decisions rendered in FY 1997 on Social Security cases, only 22 failed to uphold the Agency's position-Jess than 5 percent. When the circuit court does not uphold the Agency's decision, it is usually based on a finding that our decisionmakers failed to follow or incorrectly applied our national rules. Rarely, on average three or four times a year , does a circuit court decision conflict with SSA' s national rules. When this happens, we issue an Acquiescence Ruling, unless we change the national rules or, in rare cases, appeal the decision to the Supreme Court. This has been our policy since 1985. The publication of this rule in regulations in 1990 essentially ended criticism by the courts of our prior policy of "nonacquiescence."
Prior to 1985, when a circuit court decision was inconsistent with our interpretation of the law and regulations, SSA's practice had been to apply the decision only to named litigants in that particular case. In June of 1985, however, reacting to criticism of this practice in both Congress and the courts, the agency announced a new policy wherein conflicting circu it court decisions would apply at the hearings level, following an Acquiescence Ruling, in adjudicating claims in that circuit. In 1990, the agency went even further-promulgating regulations certifying that SSA acquiesces in circuit court decisions at all levels of administrative adjudication, not just at hearings.
Acquiescence Rulings explain how SSA will apply the decisions of circuit courts that are at variance with our national rules for adjudicating claims. We apply the circuit court holding as explained in the ruling to other cases at all levels of adjudication in the same circuit when the issues involved are the same. Acquiescence Rulings are published in the Federal Register and are effective upon publication. They are binding on all SSA components unless superseded, rescinded, or modified by another published ruling. This has been our policy since 1990. Prior to this year, however, there were no uniform procedures in place to direct the timely development of Acquiescence Rulings, and it was left up to claimants whose cases had already been adjudicated to request readjudication if an Acquiescence Ruling affecting their case was issued. In addition, we recognized that there were undue delays in issuing Acquiescence Rulings.
As I mentioned, last month we issued revised regulations to ensure that Acquiescence Rulings are developed and issued promptly and that pending claims which might be affected by an Acquiescence Ruling are identified as soon as possible. The new acquiescence regulations were published as final in the Federal Register on May 8, 1998. They fully protect the interests of claimants sought to be protected by S. 1166, as follows :
- Early identification, by claimants and SSA, of claims potentially affected by a circuit Court
of Appeals holding. SSA will, within ten days after we receive a circuit court decision that
we determine may contain a holding which conflicts with our interpretation of the Act or
regulations, begin identifying claimants with potentially affected claims;
- Expeditious issuance of an acquiescence ruling (within 120 days after receipt by SSA of the
Court of Appeals decision);
- Individual notification by SSA to previously identified claimants that an acquiescence
ruling has been issued and their right to request re-adjudication under the acquiescence
- Limits on when SSA will re-litigate an issue after publishing an acquiescence ruling; and
- Consistent application of SSA's rules because all adjudicators will receive the same
instructions on how to apply the holding.
Mr. Chairman, as far as SSA is concerned, S. 1166, the Federal Agency Compliance Act is not needed. I can assure you that no legislation is needed for SSA to follow circuit court decisions.
Additionally, we oppose the provision in S. 1166 which would require government officers to ensure that the United States not engage in "unnecessary repeti tive litigation" by continuing to litigate an issue of law that has been resolved against the government by three or more Courts of Appeal. SSA' s must be able to appeal a decision which we determine conflicts with the Social Security Act or our own regulations. Moreover, the Supreme Court has recognized the propriety and salutary effects of the government's continuing to litigate legal decisions previously decided against it in Courts of Appeals.
I would note that in nearly every court term, the Supreme Court issues a decision rejecting rulings of three of more Courts of Appeals. Since the Supreme Court has demonstr ated this willingness from time to time to revisit issues on which the Courts of Appeals are largely in agreement, SSA should continue to have the discretion to seek furth er review when such issues are involved. Experience shows that Federal Agencies and the Department of Justice act with restraint in the exercise of this discretion. Limiting SSA' s ability to continue to litigate issues in the manner stated in S. 1166 restricts the Commissioner' s ability to determine Agency rules.
The same restriction on continuing to litigate in S. 1166 is also a problem in H.R. 1544, a companion bill passed by the House on February 28, 1998.
In addition to these concerns, HR. 1544 represents a fundamental shift in the role of the Commissioner in administrative jurisdiction. A core concept of administrative law is that Congress and the Commissioner set the Agency's rules, and adjudicators find the facts. By requiring each of SSA's more than 32,000 employees who rule on claims (including, but not limited to, ALJs) to individually apply their own interpretation of circuit court decisions without waiting for the Commissioner to issue an Acquiescence Ruling applicable to all SSA adjudicators, it would bring chaos to our decisionmaking process.
If each of SSA's thousands of decisionmakers were responsible for interpreting circuit court holdings, it could result in conflicting decisions by different decisionmakers, even within the same office. SSA would have no way to ensure uniform application of eligibility standards as required by law, leading to further litigation. Indeed, SSA would have no mechanism to ensure that agency rules are consistently applied, since, under this approach, it would he each adjudicator 's role to interpret circuit court decisions for him or herself. Such a requirement would also greatly confuse our claimants. One person's claim could he decided one way, while a neighbor 's identical claim could be decided a different way; i.e., a different interpretation of law might be applied to the same or a similar set of facts and could result in different outcomes. Not only would this be unfair, it would undermine public confidence in our decisionmaking process and lead to an increase in the number of cases appealed at all levels of review. It could as well increase the cost of hearings and increase processing times, and make hearings more adversarial because it might necessitate the presence of an SSA representative to present to the ALJ SSA' s interpretation of a court's holding.
Compare this to our current rule. Potentially affected cases are identified as soon as possible. The interpretation of the circuit court's decision and its consistency with SSA policy is appropriately determined after careful scrutiny by SSA officials who have a broad understanding of the national program and who work closely with Department of Justice attorneys in this effort. All adjudicators would have the same rules to apply_ All this is within the framework of our regulatory goal of issuing an Acquiescence Ruling within 120 days after receipt of the circuit court decision.
Far from having a "non-acquiescence policy," SSA strongly supports the adjudicator's responsibility to impartially find the facts, apply Agency rules to them, and issue a decision. Nonetheless, it remains the responsibility of Congress and the Commissioner to decide what the eligibility standards and rules are. The Commissioner's duties also include interpreting the statute as well as deciding whether or not a circuit court decision conflicts with SSA national rules and regulations and, if so, how that holding should be applied in deciding other claims within the applicable circuit. This is vital in order to maintain decisional consistency not only within a particular adjudicatory level, but across levels as well- a key goal in our process unification efforts to obtain similar results in similar cases at all levels of SSA adjudication. This is the best way to ensure that constitutional and statutory requirements are properly and consistently applied and that the Agency can be held accountable for any failure to do so.
Although S. 1166, as currently written, is arguably consistent with SSA's acquiescence policy, we are concerned that as it goes through the legislative process it may be amended to parallel H.R. 1544, which we strongly oppose.
In closing, Mr. Chairman, we are proud of SSA's recent record in applying circuit court decisions. SSA's newly revised regulations for issuing Acquiescence Rulings constitute a successful and balanced exercise of our responsibility to administer the vast and complex Social Security benefit programs in a manner that is least burdensome to our claimants and preserves our ability to maintain national uniformity in program administration and adjudication. We do not think S. 1166 is necessary and we are strongly opposed to H.R. 1544 as passed by the House.