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GRANBERG v. BOWEN

July 18, 1989

ANDREW GRANBERG, Plaintiff
v.
OTIS BOWEN, SECRETARY of HEALTH and HUMAN SERVICES, Defendant


D. Brooks Smith, United States District Judge.


The opinion of the court was delivered by: SMITH

In this Social Security appeal, we are asked by the plaintiff to assume jurisdiction in a case where he challenges, not the Secretary's initial substantive decision on the claim for benefits, but rather an order of dismissal of plaintiff's Request for a Hearing. The Secretary contends that because this was not a final decision "made after a hearing," 42 U.S.C. § 405(g), we are without jurisdiction. For the reasons stated below, we believe that our judicial review is appropriate and remand for an evidentiary hearing.

 Plaintiff filed for Supplemental Security Income Benefits *fn1" on February 25, 1987. See Defendant's Brief in Support of Motion To Dismiss, Exhibit 3, p. 1 (hereinafter Govt. Brf). This claim was denied initially, and later upon reconsideration. Govt. Brf., Exhibit 1. Plaintiff then requested a hearing before an Administrative Law Judge (ALJ). This request was granted and a hearing was scheduled for February 16, 1988. Govt. Brf, Exhibit 3. Both plaintiff's counsel and plaintiff's mother, plaintiff's key witness, had scheduling conflicts with the hearing date. Plaintiff's counsel informed plaintiff's mother that he would seek a continuance. *fn2"

 By oversight, no continuance was sought. Govt. Brf, Exhibits 4 and 5. The hearing was held as scheduled, but neither plaintiff's counsel nor his mother appeared. *fn3" Subsequently, the ALJ issued a Notice to Show Cause For Failure to Appear. Upon receipt plaintiff's counsel immediately contacted the ALJ, tendered an apology and explained what had happened. Counsel then requested another hearing. Govt. Brf, Exhibit 5.

 The ALJ denied plaintiff's request for a second hearing. In addition, the ALJ dismissed plaintiff's request for a hearing before an ALJ because plaintiff had failed to show good cause for his absence at the scheduled hearing. *fn4" The ALJ's Order of Dismissal first noted that plaintiff's present counsel had not been appointed as plaintiff's attorney of record at that time. Then, the ALJ stated that counsel's "negligence is not good cause for the failure of any one to appear at the hearing." Govt. Brf, Exhibit 6.

 Plaintiff next requested that the Appeals Council vacate the ALJ's order of dismissal. Govt. Brf, Exhibit 7. The Appeals Council denied plaintiff's request. The council concluded that it had no basis for review under the Social Security regulations. *fn5" Govt. Brf, Exhibit 11. Thereafter, plaintiff timely filed this action.

 The Secretary of Health and Human Services (Secretary) contends in his Motion to Dismiss that this Court is without jurisdiction over this social security matter. The Secretary relies upon section 405(g) of the Social Security Act which provides judicial review for those individuals aggrieved by "any final decision of the Secretary made after a hearing. . . ." 42 U.S.C. § 405(g). As further support for its position, the Secretary cites Califano v. Sanders, 430 U.S. 99, 51 L. Ed. 2d 192, 97 S. Ct. 980 (1977). In Sanders, the Court held that section 405(g) "clearly limits judicial review to a particular type of agency action, 'a final decision of the Secretary made after a hearing.'" Id. at 108. Therefore, the Secretary argues that since the plaintiff did not have a hearing before the ALJ, judicial review cannot be granted.

 Plaintiff asserts that Sanders is inapposite to the case at bar. Plaintiff argues that a literal adherence to this statutory provision would give unfettered discretion to the Secretary to make decisions affecting claimants and their right to receive benefits without judicial review. In support of his position, plaintiff cites several district court decisions.

 Before we reach the merits, we note the procedural posture of this case. Federal Rule of Civil Procedure 12(b) provides that motions which present matters "outside the pleading[s]" shall be treated as one for summary judgment. Since the Secretary has presented numerous exhibits and a sworn affidavit, we will resolve this motion in accordance with Rule 56. This requires that the facts "be viewed in the light most favorable to the party opposing the motion." Betz Laboratories Inc. v. Hines, 647 F.2d 402 (3rd Cir.1981).

 We note at the outset that the resolution of this matter cannot be decided solely on the basis of Califano v. Sanders, 430 U.S. at 99, for Sanders is the progeny of two earlier Supreme Court decisions regarding the Social Security Act and district court judicial review. Weinberger v. Salfi, 422 U.S. 749, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975); Mathews v. Eldridge, 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976).

 Weinberger v. Salfi, 422 U.S. at 749, presented the Court with the question of whether the District Court had jurisdiction over a constitutional challenge to Social Security regulations affecting a plaintiff's eligibility for benefits. Plaintiff had relied on section 1331 for jurisdiction in the District Court. 28 U.S.C. § 1331. The Court held that section 405(h) of the Social Security Act "precludes resort to federal-question jurisdiction for the adjudication of appellees' constitutional question." Salfi, 422 U.S. at 761 (construing 42 U.S.C. § 405(h)). *fn6" The plaintiff's constitutional claim, however, could be brought under the jurisdictional grant in section 405(g) of the Social Security Act. 42 U.S.C. § 405(g).

 Section 405(g) provides for district court review for "any individual, after any final decision of the Secretary made after a hearing. . . ." 42 U.S.C. § 405(g). The Court interpreted this provision as a requirement that judicial review could be obtained once an individual had presented an application for benefits to the Secretary and exhausted internal review procedures. Salfi, 422 U.S. at 763-765. Inasmuch as the plaintiff in Salfi presented a constitutional claim which was beyond the Secretary's power to decide, the plaintiff did not have to exhaust all administrative procedures to obtain judicial review.

 The Court revisited its decision in Weinberger v. Salfi, supra, the following year in Mathews v. Eldridge, 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976), a case which also presented the Court with a constitutional question. Again, the Court addressed whether it had jurisdiction before it reached the constitutional issue.

 In Eldridge, the claimant had failed to exhaust administrative remedies under the Social Security regulations because he did not seek reconsideration of the initial termination of his benefits. On this basis, the Secretary argued that the claimant could not obtain ...


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