Argued
March 18, 2019
ON
WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SIXTH CIRCUIT
The
Social Security Act permits judicial review of "any
final decision . . . after a hearing" by the Social
Security Administration (SSA). 42 U.S.C. §405(g).
Claimants for, as relevant here, supplemental security income
disability benefits under Title XVI of the Act must generally
proceed through a four-step administrative process in order
to obtain federal-court review: (1) seek an initial
determination of eligibility; (2) seek reconsideration of
that determination; (3) request a hearing before an
administrative law judge (ALJ); and (4) seek review of the
ALJ's decision by the SSA's Appeals Council. See 20
CFR §416.1400. A request for Appeals Council review
generally must be made within 60 days of receiving the
ALJ's ruling, §416.1468; if the claimant misses the
deadline and cannot show good cause for doing so, the Appeals
Council dismisses the request, §416.1471.
Petitioner
Ricky Lee Smith's claim for disability benefits under
Title XVI was denied at the initial-determination stage, upon
reconsideration, and on the merits after a hearing before an
ALJ. The Appeals Council later dismissed Smith's request
for review as untimely. Smith sought judicial review of the
dismissal in a Federal District Court, which held that it
lacked jurisdiction to hear the suit. The Sixth Circuit
affirmed, maintaining that the Appeals Council's
dismissal of an untimely petition is not a "final
decision" subject to federal-court review.
Held:
An Appeals Council dismissal on timeliness grounds after a
claimant has had an ALJ hearing on the merits qualifies as a
"final decision . . . made after a hearing" for
purposes of allowing judicial review under §405(g). Pp.
5-16.
(a) The
statute's text supports this reading. In the first clause
("any final decision"), the phrase "final
decision" clearly denotes some kind of terminal event,
and Congress' use of "any" suggests an intent
to use that term "expansive[ly]," Ali v.
Federal Bureau of Prisons, 552 U.S. 214, 218-219. The
Appeals Council's dismissal of Smith's claim fits
that language: The SSA's regulations make it the final
stage of review. See 20 CFR §416.1472. As for the second
clause ("made after a hearing"), Smith obtained the
kind of hearing that §405(g) most naturally suggests: an
ALJ hearing on the merits. This case differs from
Califano v. Sanders, 430 U.S. 99, where the Court
found that the SSA's denial of a claimant's petition
to reopen a prior denial of his claim for benefits-a second
look that the agency had made available to claimants as a
matter of grace-was not a final decision under §405(g).
Here, by contrast, the SSA's "final decision"
is much more closely tethered to the relevant
"hearing." A primary application for benefits may
not be denied without an ALJ hearing (if requested),
§405(b)(1), and a claimant's access to this first
bite at the apple is a matter of legislative right rather
than agency grace. There is also no danger here of thwarting
Congress' own deadline, where the only potential
untimeliness concerns Smith's request for Appeals Council
review, not his request for judicial review following the
agency's ultimate determination. Pp. 6-9.
(b) The
statutory context also weighs in Smith's favor. Appeals
from SSA determinations are, by their nature, appeals from
the action of a federal agency. In the separate
administrative-law context of Administrative Procedure Act
(APA) review, 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 been determined,' or from
which 'legal consequences will flow.'"
Bennett v. Spear, 520 U.S. 154, 177-178. Both
conditions are satisfied when a Social Security claimant has
reached the final step of the SSA's four-step process and
has had his request for review dismissed as untimely. While
the administrative-exhaustion requirement "should be
applied with regard for the particular administrative scheme
at issue," Weinberger v. Salfi, 422 U.S. 749,
765, the differences between the two Acts here suggest that
Congress wanted more oversight by the courts rather than less
under §405(g) and that "Congress designed [the
statute as a whole] to be 'unusually protective' of
claimants," Bowen v. City of New York, 476 U.S.
467, 480. SSA is also a massive enterprise and mistakes will
occur; Congress did not suggest that it intended for this
claimant-protective statute to leave a claimant with no
recourse to the courts if a mistake does happen. Pp. 9-10.
(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, 476 U.S. 667, 670. The
heavy burden for rebutting this presumption is not met here.
Congress left it to the SSA to define the procedures that
claimants like Smith must first pass through, but it has not
suggested that it intended for the SSA to be the unreviewable
arbiter of whether claimants have complied with those
procedures. Pp. 10-11.
(d) The
arguments of amicus in support of the judgment do
not alter this conclusion. 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. However, this
Court's precedents do not support that reading; the
Appeals Council's dismissal is not merely collateral but
an end to a proceeding in which a substantial factual record
has already been developed and on which considerable
resources have already been expended; and Smith's case is
distinct from Sanders. Amicus also claims
that permitting greater judicial review could risk a flood of
litigation, given the large volume of claims handled by the
SSA, but that result is unlikely, because the number of
Appeals Council untimeliness dismissals is comparatively
small, and because data from the Eleventh Circuit, which
follows the interpretation adopted here, do not bear out
amicus' warning. Third, amicus flags
related contexts that could be informed by this ruling, but
those issues are not before the Court. Finally,
amicus argues that §405(g) is ambiguous and
that the SSA's longstanding interpretation of its
meaning-prior to a change of position in this case-is
entitled to deference under Chevron U.S. A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837,
but this is not the kind of question on which courts defer to
agencies. Pp. 11-14.
(e) A
reviewing court that disagrees with the procedural ground for
the Appeals Council dismissal should in the ordinary case
remand the case to allow the agency to address substantive
issues in the first place. While there would be jurisdiction
for a court to reach the merits, this general rule comports
with fundamental administrative-law principles and is
confirmed by the Court's cases discussing exhaustion in
the Social Security context, see City of New York,
476 U.S.__, at 485. Pp. 14-16. 880 F.3d 813, reversed and
remanded.
OPINION
SOTOMAYOR JUSTICE
The
Social Security Act allows for judicial review of "any
final decision . . . made after a hearing" by the Social
Security Administration (SSA). 42 U.S.C. §405(g).
Petitioner Ricky Lee Smith was denied Social Security
benefits after a hearing by an administrative law judge (ALJ)
and later had his appeal from that denial dismissed as
untimely by the SSA's Appeals Council-the agency's
final decisionmaker. This case asks whether the Appeals
Council's dismissal of Smith's claim is a "final
decision . . . made after a hearing" so as to allow
judicial review under §405(g). We hold that it is.
I
A
Congress
enacted the Social Security Act in 1935, responding to the
crisis of the Great Depression. 49 Stat. 620; F. Bloch,
Social Security Law and Practice 13 (2012). In its early
days, the program was administered by a body called the
Social Security Board; that role has since passed on to the
Board's successor, the SSA.[1]
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, 53 Stat. 1360. First, Congress gave the agency
"full power and authority to make rules and regulations
and to establish procedures . . . necessary or appropriate to
carry out" the Act. §405(a). Second, Congress
directed the agency "to make findings of fac[t] and
decisions as to the rights of any individual applying for a
payment" and to provide all eligible claimants-that is,
people seeking benefits-with an "opportunity for a
hearing with respect to such decision[s]."
§405(b)(1). Third, and most centrally, Congress provided
for judicial review of "any final decision of the
[agency] made after a hearing." §405(g). At the
same time, Congress made clear that review would be available
only "as herein provided"-that is, only under the
terms of §405(g). §405(h); see Heckler v.
Ringer, 466 U.S. 602, 614-615 (1984).
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 oldage, survivor, and disability benefits to
insured individuals irrespective of financial need."
Bowen v. Galbreath, 485 U.S. 74, 75 (1988). Title
XVI provides supplemental security income benefits "to
financially needy individuals who are aged, blind, or
disabled regardless of their insured status."
Ibid. The regulations that govern the two programs
are, for today's purposes, equivalent. See Sims v.
Apfel, 530 U.S. 103, 107, n. 2 (2000).[4] Likewise,
§405(g) sets the terms of judicial review for each. See
§1383(c)(3).
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 20 CFR §416.1400. If a claimant has
proceeded through all four steps on the merits, all agree,
§405(g) entitles him to judicial review in federal
district court.[5]
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 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 ...