Testimony given by Arthur Fried, SSA General Counsel, from the 10/27/1999 Hearing on the "Federal Agency Complience Act".
This hearing was held before the House Committee on the Judiciary, Subcommittee on Administrative and Commercial Law
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here to discuss the Social Security Administration’s views on H.R. 1924, the “Federal Agency Compliance Act.” At the outset, we want to make two important points. First, we want to assure you that no legislation is needed in this area with respect to the Social Security Administration (SSA) because SSA follows circuit court holdings that conflict with the Agency’s interpretation of the Social Security Act (the Act) or regulations unless we decide to relitigate and publish a notice in the Federal Register as provided in our regulations. Second, this legislation would harm Social Security and Supplemental Security Income (SSI) claimants and programs because it would result in inconsistent decisionmaking by SSA adjudicators.
On the first point, when a U.S. Court of Appeals issues a decision on a claim for Social Security benefits, or SSI payments, and SSA determines that the holding in the decision conflicts with its interpretation of the statute or regulations, it either issues an Acquiescence Ruling, changes its national rules or seeks further judicial review. SSA’s regulations require it to quickly issue Acquiescence Rulings and identify the cases of other claimants who may be affected by the ruling. Partially through the urging of this committee, SSA has continuously been improving this process. Last year, the Agency issued regulations with the goal of publishing Acquiescence Rulings within 120 days and we have been complying with these regulations.
On the second point, the legislation under consideration, would allow SSA’s 32,000 decisionmakers to interpret Circuit Court decisions as soon as those decisions are issued without waiting for an Acquiescence Ruling. Court decisions are frequently broad in nature with little guidance as to how they should be applied to any fact situation other than the facts at issue in the case. On the other hand, Acquiescence Rulings provide specific guidance as to how a Circuit Court decision should be applied to a myriad set of fact situations in the circuit involved. Therefore, Acquiescence Rulings ensure consistency among the Agency adjudicators. For these reasons, in H.R. 1924, the last sentence of sec. 2(a) adding sec. 707(a), “All officers and employees of an agency, including administrative law judges, shall adhere to such precedent,” should be deleted.
Below is a description of SSA’s appeals process, its acquiescence regulations, and the Social Security Administration’s views on H.R. 1924.
A person who is dissatisfied with an initial determination, may pursue an appeal through SSA’s administrative appeals process and the Federal courts. The Act requires the Commissioner to provide a claimant the opportunity for a hearing, and allows for filing of a civil action in Federal court after the Commissioner's final decision. SSA’s regulations also provide an opportunity for final review after the hearing by SSA’s Appeals Council.
The administrative appeals process provides a de novo hearing before an administrative law judge (ALJ) who can call on medical or vocational experts, if needed, to help evaluate the evidence. Usually the claimant obtains 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 and to call witnesses.
The final administrative appeal is before the Appeals Council which may grant, deny, or dismiss a request for review of the ALJ 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 if 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.
Only a small number of the cases affirmed by district courts are appealed to the circuit courts. In the overwhelming majority of the 521 circuit court decisions rendered in FY 1998 on Social Security cases, either SSA received an affirmation of its position (384 cases, 74 percent) or the claimant’s case was dismissed (52 cases, 10 percent). Circuit courts remanded 73 cases (14 percent) for further action. When the circuit court does not uphold the Agency’s decision, it is usually based on a finding that the evidence does not support the decision or that our decisionmakers failed to follow or incorrectly applied our national rules.
Rarely, on average three or four times a year, do the courts of appeals issue a decision with a holding that conflicts with SSA’s interpretation of the statute or regulations. When such a conflict occurs, SSA generally issues an Acquiescence Ruling. In rare cases, it seeks further judicial review. This has been the Agency’s practice since 1985. The formal codification of this practice in regulations in 1990 essentially ended criticism by the courts of SSA’s practice regarding failure to follow holdings of courts of appeals. This change in position by the courts is evidence that the legislation under consideration is not necessary.
Acquiescence Rulings explain how SSA will apply the decisions of courts of appeals that it determines contain a holding that conflicts with its national rules for adjudicating claims. SSA applies the Court of Appeals holding, as explained in the ruling, to other cases involving the issue at all levels of adjudication in the same circuit unless the holding, by its nature, applies only at certain levels of adjudication. 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.
Last year, SSA 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. These final regulations were published in the Federal Register on May 6, 1998 and supplemented longstanding rules and practice of appropriately applying the holdings of the Court of Appeals. The regulations fully protect the interests of claimants sought to be protected by H.R. 1924, by providing for:
• Early identification by SSA of claims potentially affected by a Court of Appeals’ holding;
• Self-identification of claims or cases by claimants or their representatives as being potentially affected by a Court of Appeals decision;
• Expeditious issuance of an Acquiescence Ruling (with a goal to publish an AR in the Federal Register 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 that they have a right to request re-adjudication under the Acquiescence Ruling;
• 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 guidance on how to apply the holding.
H.R. 1924, the Federal Agency Compliance Act, is not needed to mandate that SSA follow Court of Appeals decisions because SSA already does.
SSA opposes the provision in H.R. 1924 that 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 and apply the established rules to those facts. By requiring each of the more than 32,000 individuals who rule on SSA claims (including, but not limited to, ALJs) to individually apply their own interpretation of Court of Appeals decisions without guidance from the Commissioner, would greatly undermine fairness and consistency in 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 be each adjudicator's role to interpret circuit court decisions for him or herself. SSA, the claimants, and the courts might not even know what adjudicatory standard was applied.
Such a requirement would also greatly confuse claimants. One person’s claim could be 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 the decisionmaking process and lead to an increase in the number of cases appealed at all levels of review. It could also increase administrative costs and processing times. In contrast, SSA’s timely issuance of ARs ensures that all adjudicators apply the same rules fairly and consistently.
SSA’s current regulations ensure the consistent application of Agency rules. Claims that could be affected by adverse Court of Appeals holdings are identified as soon as possible. The interpretation of the circuit court's holding and its consistency with SSA’s interpretation of the statute and regulations is appropriately determined after careful scrutiny by SSA officials who have a broad understanding of the national program. All this is within the framework of our regulatory goal of publishing an Acquiescence Ruling in the Federal Register within 120 days after receipt of the Court of Appeals decision. In addition, after a Court of Appeals issues a decision, the Agency has 45 days to petition for rehearing, and 90 days to seek certiorari after the decision (or after the denial of rehearing). SSA’s timeframe for issuing acquiescence rulings, therefore, corresponds with the time that is taken in deciding whether to seek further judicial review in court.
Additionally, we oppose the provision in H.R. 1924 which would require government officers to ensure that the United States not engage in “unnecessarily repetitive litigation” by continuing to litigate an issue of law that has been resolved against the government by three or more Courts of Appeals. SSA must be able to appeal a decision which it determines conflicts with the Social Security Act or its own regulations. Moreover, the Supreme Court has recognized the propriety and salutary effects of the government’s continuing to litigate decisions previously decided against it by other Courts of Appeals.
In nearly every court term, the Supreme Court has issued a decision rejecting rulings of three or more Courts of Appeals. Since the Supreme Court has demonstrated this willingness to revisit issues on which the Courts of Appeals are largely in agreement, SSA should continue to have the discretion to seek further 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 H.R. 1924 unduly restricts the Commissioner’s ability to determine Agency rules. Another major concern is accurately determining when three circuits have litigated an issue of law. The facts and scope of judicial review in similar cases are seldom identical and can be subject to disparate interpretations.
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 a circuit court holding conflicts with SSA’s national rules 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—which is a key goal in our efforts to obtain similar results in similar cases at all levels of SSA adjudication. Allowing the Commissioner to state the Agency’s rules via the timely issuance of Acquiescence Rulings 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.
In closing, we are proud of SSA's current record in applying circuit court decisions. SSA's 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. SSA strongly believes that H.R. 1924 is not only unnecessary, but its provisions would undermine the consistent and fair administration of complex programs that are vital to so many people.