EFFECTIVE/PUBLICATION DATE: 07/16/90
AR 90-4(4): Culbertson v. Secretary of Health and Human Services, 859 F.2d 319 (4th Cir. 1988); Young v. Bowen, 858 F.2d 951 (4th Cir. 1988) -- Waiver of Administrative Finality in Proceedings Involving Unrepresented Claimants Who Lack the Mental Competence to Request Administrative Review -- Titles II and XVI of the Social Security Act.
Whether the rules of administrative finality apply to proceedings involving unrepresented claimants who lack the mental competence to request reconsideration or request a hearing before an Administrative Law Judge.
Sections 205(a) and 1631(d)(1) of the Social Security Act (42 U.S.C. 405(a) and 1383(d)(1)), 20 C.F.R. 404.900(b), 404.905, 404.921, 404.987, 404.988, 416.1400(b), 416.1405, 416.1421, 416.1487, and 416.1488.
Fourth (Maryland, North Carolina, South Carolina, Virginia, West Virginia)
Culbertson v. Secretary of Health and Human Services, 859 F.2d 319 (4th Cir. 1988); Young v. Bowen, 858 F.2d 951 (4th Cir. 1988).
APPLICABILITY OF RULING:
This Ruling applies to determinations or decisions at all administrative levels (i.e., initial, reconsideration, administrative law judge hearing and Appeals Council).
DESCRIPTION OF CASES:
On January 6, 1976, an application for child's insurance benefits based on disability was filed on behalf of a 30 year old claimant by her father. The application alleged that the claimant had been mentally retarded and disabled since her birth on March 12, 1945. The application was denied on February 27, 1976. The claimant herself filed a second application on October 11, 1977, again alleging that she had been mentally retarded since birth. This application was also denied initially. The claimant, who was not represented by legal counsel with regard to either the first or second application, did not seek reconsideration on either application.
The claimant filed her third and most recent application for benefits on September 22, 1980. Following an initial denial, she obtained legal counsel and filed a request for reconsideration. Upon denial of her reconsideration, she requested a hearing before an administrative law judge. After a hearing, the ALJ concluded that the claimant had proved the existence of "an overwhelming nonexertional impairment which rendered her disabled prior to age 22." The ALJ also determined that the February 27, 1976, initial determination to deny benefits should be reopened and revised to grant benefits based on her first application.
On its own motion, the Appeals Council reviewed the ALJ's decision, reversed the award based on the claimant's first application, and remanded the case for further proceedings. The Council reasoned that an administrative determination more than four years old could not be reopened. In the Council's view the first determination was final and could not be reopened under regulation 20 C.F.R. 404.988.
Upon remand, the ALJ again concluded that the claimant was disabled as a result of a severe mental impairment and reopened the 1976 application because the claimant's mental and emotional impairments had prevented her from pursuing her appeal rights with regard to the 1976 application. The Appeals Council reviewed the decision and agreed that the claimant had been under a continuous disability which commenced prior to her twenty- second birthday. However, the Council concluded that retroactive benefits could be awarded only with regard to her second application.
The claimant then sought judicial review of the Appeals Council decision. The district court remanded the case for further administrative proceedings and on remand the ALJ again reopened the first determination. The Appeals Council overruled the ALJ's decision regarding this reopening. The district court upon reviewing the Secretary's final decision after its remand order concluded that, because the claimant's father filed the first application on her behalf, it was the mental competence of the claimant's father that controlled any due process analysis of the Secretary's decision. The court again remanded the case so that the Agency could consider the father's mental competency. The claimant appealed that order to the United States Court of Appeals for the Fourth Circuit alleging that both the district court's remand order and the Secretary's decision not to reopen her first application were contrary to Fourth Circuit law.
The claimant filed applications for disability insurance benefits and Supplemental Security Income (SSI) on December 10, 1979, alleging disability due to mental illness beginning December 30, 1977. These applications were denied initially and upon reconsideration. The claimant, who was not represented by legal counsel, did not request further administrative review. She filed her second application for SSI on July 7, 1980 and was again denied initially on March 9, 1981. Still without representation, she did not appeal this determination. On March 18, 1983 she filed her third application for SSI. This application was denied initially and upon reconsideration. The claimant, then represented by counsel, filed a request for hearing. After a hearing, the ALJ issued a decision denying her application. This became the final decision of the Secretary when the Appeals Council denied her request for review. The claimant then sought judicial review.
During the time her civil action was pending, Congress enacted the Social Security Disability Benefits Reform Act of 1984. Pursuant to that legislation, the claimant's case was remanded for further administrative proceedings.
In accordance with the remand a supplemental hearing was held on December 13, 1986. The claimant submitted extensive new medical evidence and requested that her prior applications be reopened. The ALJ, in a recommended decision, found that she was disabled under section 12.05(c) of the Listing of Impairments in Appendix 1 to Subpart P of Social Security Administration Regulations No. 4, but refused to reopen her prior applications. The Appeals Council (AC) agreed that the claimant was disabled and entitled to SSI benefits, but not on the basis of 12.05(c). The AC refused to reopen her prior applications because they found that the claimant was not disabled during the periods covered by those applications. The claimant returned to district court alleging that she had lacked the mental capacity to contest the denial of benefits based on her earlier applications and that the Secretary's refusal to reopen those applications was a violation of constitutional due process. The district court affirmed the Secretary's decision. The claimant then appealed to the United States Court of Appeals for the Fourth Circuit.
The Court of Appeals for the Fourth Circuit stated that it viewed the district court's order as a final denial of claimant's appeal making it appropriate for review by the Circuit Court.
The court of appeals disagreed with the district court and held that it was the mental competency of the claimant, not the claimant's father, that was at issue. The court distinguished its earlier holding in Robinson v. Heckler, 783 F.2d 1144 (4th Cir. 1983) on the basis that in Robinson the claimant's mother was serving as her legal guardian, whereas in the instant case, Culbertson's father was neither her legal guardian nor her legal representative. The court described Culbertson's father as only a "willing volunteer" who merely filed the application for his daughter, without any responsibility for furthering her claim. The court prohibited the Secretary from binding a claimant to an adverse ruling when that individual lacked both the mental competence and legal assistance necessary to contest the initial determination. The court held that the Secretary may not utilize the administrative finality regulations in such a fashion as "to deny a pro se mentally impaired claimant a full and fair opportunity to establish a statutory entitlement" to benefits. The court concluded that the Secretary could not refuse to reopen the claimant's 1976 application after the claimant established a prima facie case of mental incompetence in 1976 unless he first refuted that showing.
The Fourth Circuit stated that "It offends fundamental fairness, . . ., to bind a claimant to an adverse ruling who lacks both the mental competency and the legal assistance necessary to contest the initial determination. . . . [I]t operates with equal force whether the Secretary relies upon res judicata or some other procedural limitation." The court went on to state that it was of no moment that more than four years had passed before the claimant who was unrepresented at the time of her previous determinations sought to have them reopened. Accordingly, the court held that once the claimant presented proof that mental illness prevented her from understanding the procedure necessary to obtain an evidentiary hearing after the denial of her prior claim, the Secretary could not decline to reconsider the previous claim because of res judicata or administrative finality unless he first conducted an evidentiary hearing and rebutted the prima facie case.
After review of the evidence of record, the Fourth Circuit found that the claimant's mental condition rendered her unable to pursue her prior applications for benefits through a full administrative appeal and that "[t]o the extent, therefore, that the Secretary has purported to refuse to reopen those claims on procedural grounds, whether designated as res judicata or administrative finality, the decision must be overturned."
STATEMENT AS TO HOW CULBERTSON AND YOUNG DIFFER FROM SOCIAL SECURITY POLICY:
SSA policy reflected in sections 404.988 and 416.1488 of Social Security Administration Regulations No. 4 and 16 (20 C.F.R. 404.988 and 416.1488) is that administrative determinations and decisions are final if they are not appealed to the next step in the administrative review process within 60 days. 20 C.F.R. 404.988 and 416.1488 set out the rules for reopening and revising final determinations and decisions. These rules provide that, after four years from the date of the notice of the initial determination in Title II cases and two years in Title XVI cases, a final determination or decision can be reopened only for a reason listed in 404.988(c) or 416.1488(c), respectively. The regulations do not provide that a final determination or decision can be reopened and revised if the claimant can establish that he or she was unrepresented and lacked the mental competence to request administrative review.
The holdings in Culbertson and Young mandate that SSA reopen an otherwise final administrative determination at any time when a claimant, who had no individual legally responsible for prosecuting the claim (e.g., a parent of a claimant who is a minor, legal guardian, attorney, or other legal representative) at the time of the prior determination, establishes a prima facie case that mental incompetence prevented him or her from understanding the procedure necessary to request administrative review, unless it holds an evidentiary hearing and determines that mental incompetence did not prevent the claimant from filing a timely appeal.
EXPLANATION OF HOW SSA WILL APPLY THE DECISIONS WITHIN THE CIRCUIT:
This ruling applies only to cases in which the claimant resides in Maryland, North Carolina, South Carolina, Virginia, or West Virginia.
Where an initial or reconsideration determination based on an application filed by or on behalf of a claimant, who had no individual legally responsible for prosecuting the claim (e.g., a parent of a claimant who is a minor, legal guardian, attorney, or other legal representative), has become final (i.e., the 60 day time limit for requesting administrative review has expired) and the claimant presents a prima facie case that mental incompetence prevented him or her from understanding the procedures necessary to contest that determination, SSA will determine whether the claimant actually did not understand the procedures necessary for requesting review of the prior determination. If the adjudicator determines that a prima facie case is sufficiently conclusive to establish that the claimant did not have the mental competence necessary to request review of the prior determination, then he or she will not apply res judicata or administrative finality, but will reopen the prior determination and issue a revised determination. However, if there is a question of the sufficiency of the prima facie case, the adjudicator will hold an evidentiary hearing to determine the claimant's mental competence at the time of the prior determination.
If the adjudicator determines that mental incompetence prevented the claimant from understanding the procedures for requesting administrative review of a determination, he or she will not apply res judicata or administrative finality even if more than four years have elapsed (two years in Title XVI cases), but will consider the case on its merits and issue a determination or decision that is subject to further administrative review.
If the adjudicator determines that the claimant was capable of understanding the procedures necessary to request administrative review, he or she will apply the normal rules of res judicata or administrative finality and adjudicate the pending claim, as appropriate.