APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil Action No. 72-2522)
Before VAN DUSEN, GIBBONS and HUNTER, Circuit Judges
This appeal involves a challenge to the constitutionality of the procedure established by the Secretary of Health, Education and Welfare, pursuant to section 204 of the Social Security Act,*fn1 for the recoupment of alleged overpayments of benefits. The district court, 377 F. Supp. 906 (E.D. Pa., 1974), found the recoupment procedure violative of due process since it permitted an adjustment or reduction of social security payments without affording the beneficiary the right to a prior oral hearing. While we are in substantial agreement with the opinion of the district court, we vacate and remand for entry of a new order consistent with this opinion.
Section 204(a) of the Act directs the Secretary to recover overpayments of social security benefits through recoupment of future benefit payments. Section 204(b), however, requires the Secretary to "waive" recoupment under certain circumstances. It provides that there shall be no recoupment where the overpaid beneficiary is "without fault"*fn2 and the recoupment either would "defeat the purpose" of Title II of the Act*fn3 or would be "against equity and good conscience."*fn4 Pursuant to these statutory directives, the Secretary has promulgated regulations providing for a four-step process of administrative review: an initial determination that there has been an overpayment and that there is no basis for waiver of recovery (20 C.F.R. § 404.905); a reconsideration of that initial determination upon request by the recipient (Id. § 404.914); an administrative hearing de novo before an administrative law judge (Id. § 404.917); and review by the Appeals Council of the Social Security Administration (Id. § 404.945). Judicial review is then available, under section 205(g) of the Act, 42 U.S.C. § 405(g), to claimants who have exhausted their administrative remedies.
While a claimant thus has a right to a full evidentiary hearing at the third step in the administrative process, such a hearing is not available until after the recoupment process has begun. When a claimant is notified of the initial adverse determination and of his right to seek reconsideration, he is given thirty days in which to submit, in writing, his reasons why he disagrees with the determination that he has been overpaid or why he seeks a "waiver" under section 204(b) of the Act. Once such a request for reconsideration or waiver has been filed, even if the thirty days has expired, the recoupment procedure is automatically deferred until such reconsideration is completed.*fn5 If the Secretary adheres to his initial determination, the claimant is so notified and benefits begin to be withheld. At that time, the claimant is notified of his right to seek an administrative hearing de novo, with the right to present oral testimony and to cross-examine witnesses. A request for an oral hearing, unlike a request for reconsideration, will not toll recoupment. While the record is not entirely clear, it appears that there is usually a delay of several months from the time benefits are first withheld to the time a claimant is able to obtain an oral hearing.
At the time this suit was filed, plaintiff Arlene Mattern was fifty-three years old and physically disabled. In 1971, she applied for disabled widow's benefits pursuant to 42 U.S.C. § 402(e)(1)(B)(ii), on the social security earnings record of her deceased husband. Her application was approved, and she became eligible for benefits as of May 18, 1971, with a monthly entitlement of $119.30. Because of a mandatory waiting period of six months,*fn6 plaintiff was not scheduled to begin receiving payments until December 1971. However, when plaintiff informed the social security office that she was in financial distress, she was issued, in February 1972, a check totalling $1063.80, which covered the period from May to December 1971. This payment was improper, since it had been issued in disregard of the mandatory six-month waiting period.
Plaintiff was advised of the forthcoming special check in a letter of January 28, 1972. That letter also informed her that there was a possibility of duplication of payment and that if she should receive more than one check, she should return one of them to the social security district office. Prior to the receipt of either the special check or the January 28 letter, plaintiff had received her first monthly payment of $119.30. According to records maintained by the district office, plaintiff's sister called the office on January 26, 1972, and was told that the $119.30 check was correct but that the impending special check of $1063.80 had been erroneously issued. The records also indicate that, on January 28, a district office representative phoned plaintiff to tell her that the special check being mailed was incorrect and should be returned. Plaintiff never returned the check, and denies that she ever received a phone call instructing her to return it.
Several months later, on July 14, 1972, plaintiff was sent a letter advising her that she had received $1063.80 more in social security benefits than she was entitled to and that since she had failed to return the check an adjustment would be made in her forthcoming benefit payments. Plaintiff was also informed of the "reconsideration" and "waiver" provisions of the law. On August 7, 1972, plaintiff requested the Secretary to waive recoupment of overpayment by filing both a "refund" and a "without fault" questionnaire, in which she listed her monthly expenses and stated that she had no other source of income, that she had been ill, that she had spent the check on her bills and that she had never received any letter or phone call advising her that the $1063.80 check had been sent in error. The district office rejected her request for waiver, on the ground that she was not without fault in causing the overpayment. In making this initial determination, the district office relied on its letter of January 28, advising plaintiff that if she received more than one check, she should return one of them. It also relied on its records indicating that plaintiff had been notified by phone on January 28 that the $1063.80 check was incorrect and should be returned.
Plaintiff subsequently filed a request for reconsideration and, in accordance with the Secretary's procedures, recoupment was deferred until completion of the reconsideration. On January 3, 1973, the district office reaffirmed its initial decision, and determined that her payments would be reduced by $30 per month until the full amount of the overpayment was recovered. In the meantime, plaintiff had filed this class action in the Eastern District of Pennsylvania. As a result of a stipulation between the parties, the plaintiff has continued to receive her full benefits until final disposition of her suit. The district court declared the recoupment procedure unconstitutional, and the Secretary appeals.*fn7
Plaintiff asserted several bases of jurisdiction in her complaint,*fn8 but the district court found that only one of them was appropriate - the Mandamus Act, 28 U.S.C.§ 1361 (1970).*fn9 Since we agree that jurisdiction is available under the Mandamus Act, we need not consider the other jurisdictional rulings made by the district court.
It is well established that, in order for jurisdiction to lie in mandamus, a plaintiff must allege that the defendant owes him a clear, ministerial and non-discretionary duty. As we said in Richardson v. United States, 465 F.2d 844, 849 (3d Cir., 1972), rev'd on other grounds, 418 U.S. 166, 94 S. Ct. 2940, 41 L. Ed. 2d 678, 42 U.S.L.W. 5076 (1974):
In order for mandamus to issue, a plaintiff must allege that an officer of the Government owes him a legal duty which is a specific, plain ministerial act "devoid of the exercise of judgment or discretion" [citations omitted]. An act is ministerial only when its performance is so positively commanded and so plainly prescribed as to be free from doubt.
The Secretary challenges the district court's holding that it had jurisdiction in mandamus on the ground that the duty which plaintiff seeks to compel is not a "ministerial act" which is "so plainly prescribed as to be free from doubt." After noting that the district court relied on Goldberg v. Kelly, 397 U.S. 254, 25 L. Ed. 2d 287, 90 S. Ct. 1011 (1970), in holding that due process mandated a pre-recoupment oral hearing, and after distinguishing Goldberg on the merits, the Secretary concludes that "the broad and indeterminate scope of the due process clause, as applied to the novel circumstances involved here, in no way discloses a plain and indisputable obligation that the Administration afford the hearings which the plaintiff has sought." (Br. at 34).
We believe that the Secretary's position is in error. Its chief deficiency is that in effect it confuses the issue of jurisdiction under the Mandamus Act with the process of resolving the merits of plaintiff's claim. We fully recognize that this case presents complex constitutional issues*fn10 which have not yet been definitively settled, and we agree that Goldberg v. Kelly is not plainly controlling. The complexity and novelty of the issues on the merits, however, do not necessarily deprive the federal courts of mandamus jurisdiction. A determination with respect to jurisdiction involves a threshold inquiry into whether the plaintiff has alleged a cause of action under the particular jurisdictional statute. Here, plaintiff alleges that the due process clause imposes an obligation on the Secretary to provide her with an oral hearing before adjusting her benefits. Thus, the duty alleged involves no element of discretion or room for judgment on the part of the Secretary,*fn11 and if we agree with plaintiff's contention on the merits, the result will be to place the Secretary under a binding, non-discretionary duty to provide a pre-recoupment oral hearing. Furthermore, the fact that the existence of the duty may become absolutely clear only after an interpretation of the due process clause and a consideration of the merits of the case does not deprive us of mandamus jurisdiction. See Roberts v. United States, 176 U.S. 221, 229-31, 44 L. Ed. 443, 20 S. Ct. 376 (1899); Chaudoin v. Atkinson, 494 F.2d 1323, 1330 (3d Cir., 1974); Carey v. Local Board No. 2, Hartford, Connecticut, 297 F. Supp. 252, 255 (D. Conn.), aff'd per curiam, 412 F.2d 71 (2d Cir., 1969).*fn12 Acceptance of the Secretary's reasoning would lead to an oddly circular result - if mandamus jurisdiction were unavailable because, prior to ruling on the merits, the Secretary's duty is not clear, then a court would never have jurisdiction to determine whether his duty was clear in the first place.*fn13
Furthermore, we note that this is not a case where a plaintiff seeks to impose a wholly novel obligation on Government officials through the device of mandamus. While Goldberg v. Kelly may not be plainly controlling on the merits, it is a landmark precedent which imposes, under certain circumstances, a constitutional obligation on administrators of social welfare programs to provide oral hearings, and thus it is at least arguably controlling in this case. Our task here is essentially to determine whether the same constitutional duty imposed by Goldberg in welfare termination cases is also applicable to social security cases involving recoupment of overpayments. Under these circumstances, we agree with the district court that the applicability of Goldberg is sufficiently apparent, in determining the threshold issue of mandamus jurisdiction, for us to say that plaintiff has alleged a clear duty on the part of the Secretary. We therefore believe that, since plaintiff here has relied on a closely ...