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WILKERSON v. SULLIVAN

August 25, 1989

WILLIAM WILKERSON, ROBERT J. GARDNER, WILLIAM E. SMITH, on behalf of themselves and all others similarly situated
v.
LOUIS W. SULLIVAN, M.D.1 Secretary of Health and Human Services



The opinion of the court was delivered by: HANNUM

 JOHN B. HANNUM, SENIOR UNITED STATES DISTRICT JUDGE

 This is a class action whereby the plaintiffs seek preliminary or permanent injunctive relief requiring the defendant ("the Secretary") to cease his purported policy of "nonacquiescence" and begin evaluating the claims of alcoholics for social security disability payments and supplemental security income payments under the standard announced and reaffirmed in Third Circuit case law. Plaintiffs also allege that the Secretary's current policies violate the 1984 Social Security Disability Benefits Reform Act, 42 U.S.C. § 421, note, and seek similar relief to bring the Secretary into compliance therewith.

 The class consists of:

 
All individuals suffering from medically determined and significant alcoholism, who reside in the area encompassing the Third Circuit Court of Appeals, whose Social Security Disability Insurance benefits and/or Supplemental Security Income (SSI) benefits the Social Security Administration has considered or is presently considering denying or terminating on the basis that the alcoholism is not disabling.

 Wilkerson v. Bowen, 828 F.2d 117, 120 n. 2 (3rd. Cir. 1987). *fn2"

 Inasmuch as this case implicates social security policies purely and uniquely, subject matter jurisdiction is conferred by 42 U.S.C. § 405(g) and 28 U.S.C. § 1361. See Kuehner v. Schweiker, 717 F.2d 813 (3d Cir. 1983) vacated on other grounds, 469 U.S. 977, 105 S. Ct. 376, 83 L. Ed. 2d 312 (1984). Following are the Court's findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).

 Findings of Fact

 To put this action in its proper context, one needs to understand the process by which applications for social security disability benefits or supplemental security income are processed. *fn3" A claimant first petitions a state agency, designated by the Secretary, for the benefits. If unsuccessful, the claimant then asks that state agency for reconsideration.

 If rebuffed at that level, the claimant requests a hearing before an Administrative Law Judge ("ALJ") who is an employee of the Social Security Administration. If the ALJ renders an adverse decision, the claimant then petitions the Appeals Council of the Social Security Administration for review. If the Appeals Council declines review or upholds the ALJ's decision, the claimant may then seek review by filing a civil action in the district court governing the area of his residence. The claimant then has conventional rights of appeal for adverse court decisions, including possible review by the Supreme Court.

 The courts must affirm the Secretary's findings as to disability if those findings are supported by "substantial evidence," 42 U.S.C. § 405(g). In this context, "substantial evidence" means the quantum of evidence that would defeat a motion for directed verdict if the administrative proceedings had been a civil jury trial. See Winston v. Heckler, 585 F. Supp. 362 (D.N.J. 1984) (citing and quoting from Labor Board v. Columbian Enameling and Stamping Co., 306 U.S. 292, 83 L. Ed. 660, 59 S. Ct. 501 (1939)).

 Throughout the administrative phase of the disability determination, the Secretary follows a five-step sequential process. *fn4" That process was detailed comprehensively in Bowen v. Yuckert, 482 U.S. 137, 140-42, 96 L. Ed. 2d 119, 107 S. Ct. 2287 (1987), and will be described below.

 First, the Secretary (through his agent, the ALJ), determines if the claimant is working or "engaged in substantial gainful activity" at the time of the hearing. If so, the claimant is not disabled and the inquiry ends.

 If the claimant is not working, the next issue is whether or not his impairment is "severe." "An impairment . . . is not severe if it does not significantly limit [a claimant's] physical or mental ability to do basic work activities." 20 C.F.R. § 404.1521(a). See also 20 C.F.R. § 416.921(a). The subsections that follow each of these cited C.F.R. sections list basic work activities such as walking, standing, hearing, speaking, following instructions, using judgment and general social relations.

 If the impairment is not severe, the claimant is considered not disabled. If it is severe, the next step is to determine whether the claimant's impairment(s) meets or exceeds a listed impairment. *fn5" If the listing is met or exceeded, the claimant is conclusively presumed disabled. If the listing is not met, the ALJ determines whether the claimant retains the residual functioning capacity to do his former work. If it is found that the claimant cannot perform his prior work, the burden -- after having rested with the claimant in steps one through four -- shifts to the Secretary to show that the claimant can do other work available in the national economy. See Yuckert, id. This final determination is based on the claimant's age, education and work experience.

 The Third Circuit has, in this context, articulated certain standards that the Secretary is to employ when evaluating alcoholism claims. Those standards were first announced in McShea v. Schweiker, 700 F.2d 117 (3d Cir. 1983) and followed in Purter v. Heckler, 771 F.2d 682 (3d Cir. 1985).

  In McShea, the Third Circuit surveyed law in other circuits and adopted it. In so doing, the Court said: "Chronic alcoholism . . . standing alone can, if serious enough, amount to a disability . . . . The proposition that chronic acute alcoholism is itself a disease, a medically determinable physical or mental impairment, is hardly debatable today." Id. at 118 (quoting Griffis v. Weinberger, 509 F.2d 837, 838 (9th Cir. 1975)). The Third Circuit remanded the plaintiff's case to the Secretary for evaluation under the standard noted above. The court observed: "The ALJ in the case at hand apparently believed that if he found no objective physical impairment resulting from alcoholism, the inquiry was ended. That theory, however, has been rejected by the courts." McShea, 700 F.2d at 119 (citing Hicks v. Califano, 600 F.2d 1048 (4th Cir. at 1979)). Accord Cannon v. Harris, 651 F.2d 513 (7th Cir. 1981), Adams v. Weinberger, 548 F.2d 239 (8th Cir. 1977) and Ferguson v. Schweiker, 641 F.2d 243 (5th Cir. 1981).

 In Purter v. Heckler, 771 F.2d 682, 697-98 (3d Cir. 1985), the Third Circuit explained its holding in McShea, stating

 
[In McShea ], we held that alcoholism, either standing alone or combined with other causes, may constitute a compensable injury. Consistent with this position, we rejected the Secretary's adherence to her belief that alcoholism is a self-inflicted condition. We found . . . untenable the Secretary's position that [her] inquiry into the issue of alcoholism ends with medical evidence supporting a finding of "no objective physical impairment." Because a negative attitude toward admission of a tendency to drink heavily "is a common accompaniment of the disease of alcoholism," and because the disease is often masked by other disorders which are more readily diagnosable, we imposed an affirmative duty on the ALJ to inquire further and to develop a full and fair record wherever evidence of alcohol abuse is present in the record . . . . The relevant inquiry, where there is evidence of alcoholism, is not whether the claimant should be able to control it, but rather whether the claimant is addicted to alcohol and as a consequence, has lost the ability to control its use. (citations and footnotes omitted)

 McShea and Purter form the basis of the plaintiff's suit. *fn6" They allege that, rather than obeying the mandate of those cases, the Secretary continues his prior policy of requiring so-called end-organ damage before he will find alcoholism to be a disabling condition.

 Plaintiffs allege that this is an example of a phenomenon unique to federal agencies known as "nonacquiescence."

 
"Indeed at oral argument the Justice Department attorney appearing for the [Secretary] conceded that the Social Security Administration pursues, with respect to certain rulings by courts of appeals, a policy of nonacquiescence. The Social Security Administration has, for example, adopted such a policy with respect to an April 16, 1981 decision of the United States Court of Appeals for the Ninth Circuit [ Finnegan v. Matthews, 641 F.2d 1340 (9th Cir. 1981)] holding that disability benefits could not be terminated unless it showed that there was a material improvement in the claimant's medical condition."

 Kuehner v. Schweiker, 717 F.2d 813, 816 (3d Cir. 1983), vacated on other grounds, 469 U.S. 977, 105 S. Ct. 376, 83 L. Ed. 2d 312 (1984).

 In even stronger language, the Kuehner court characterized the Secretary's nonacquiescence policy as follows:

 
It thus appears that, when the Secretary has taken a final position on a disputed question, he will continue to adhere to, and require compliance with, those views even after a Court of Appeals has resolved the issue against him. Under these circumstances, exhaustion of administrative remedies becomes a mere exercise in futility, both for the claimants and for the courts. It makes far more sense to allow the claimants to litigate the case and, if successful, to obtain a decree enforceable via contempt proceedings.

 Kuehner, 717 F.2d at 824 (Becker, J., concurring) (emphasis added).

 In this case, the plaintiffs have taken Judge Becker's advice and they seek to abate alleged nonacquiescence to McShea and Purter.

 Predictably, the Secretary denies nonacquiescence and points to a statement by his Acquiescence Task Force *fn7" professing obedience of McShea and Purter. Plaintiffs have directed the Court to several telling events or conditions that suggest otherwise. The first of those that the Court will examine is the underlying Regulations themselves.

 The Regulations

 Earlier the Court noted that a claimant will be conclusively presumed disabled if his impairments meet or exceed the listed impairments. These listings addressing alcoholism are found at § 12.09 of 20 C.F.R., Part 404, Subpart P, Appendix 1. § 12.09 cross-references to several other sections. All of these, including § 12.09, are listed in the margin. *fn8"

 But, sections 5 and 11 are direct, and rather egregious, violations of McShea and Purter. Those two sections expressly require the onset of physical symptoms that McShea and Purter just as expressly remove from the disability analysis.

 The effect of sections 5, 11 and 12 is that a claimant would never be conclusively presumed disabled under the McShea-Purter rule. This is in direct contravention of these two decisions, and renders them in large measure ineffective. Although this in itself is a blatant disregard of an appellate court's binding pronouncements, the present posture of sections 5, 11 and 12 would not be alarming if it operated only in isolation. These Regulations affect only the third step of a sequential five-step disability determination.

 But, the Regulations do not operate in isolation. The record shows other compelling evidence of a pattern of "nonacquiescence" to McShea and Purter. Some of that evidence is found in post-McShea decisions by district courts in the Third Circuit.

 Post-McShea Decisions in the Third Circuit

 The plaintiffs have directed the Court to decisions by district courts in the Third Circuit, spanning from 1983 through 1989, wherein the Secretary was reversed or remanded. Although the degree of error varied among the cases, the type of error was always the same: the failure of the Secretary and his agents to obey McShea and Purter. These cases are listed in the margin. *fn9"


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