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McWilliams v. Berryhill

United States District Court, E.D. Pennsylvania

June 25, 2019

NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.


          Timothy R. Rice U.S. Magistrate Judge.

         The notion that claims of legal error must be preserved at trial for appellate review is a bedrock tenet of our legal system. See, e.g., Judiciary Act § 25, 1 Stat 86 (“no other error shall be assigned or regarded as a ground of reversal . . . than such as appears on the face of the record”); Crowell v. Randell, 35 U.S. 368, 391 (1836) (if it does not appear on the record that an issue has been raised and decided in the lower court, “appellate jurisdiction fails”). Not only does it afford the presiding jurist an opportunity to prevent error, it arms a reviewing court with a full evidentiary and legal record to resolve appellate challenges. See Hormel v. Helvering, 312 U.S. 552, 556 (1941) (it is “essential” for litigants to have an opportunity to offer all relevant evidence at the trial level); see also Fed.R.Evid. 103(a), Adv. Comm. Notes (discussing the requirements for claiming legal error with respect to admission or exclusion of evidence). The justification for a timely challenge loses force, however, when raising such a claim would be futile and not achieve the intended goal of getting things right in the first place.

         This case presents such a dilemma.

         Petitioner Dawn McWilliams for the first time contends the presiding administrative law judge (“ALJ”) was improperly appointed and therefore lacked legal authority to decide her case.[1]See Pl. Br. (doc. 12) at 2-3 (citing Lucia v. S.E.C., 138 S.Ct. 2044, 2055 (2018) (holding ALJs employed by the Securities and Exchange Commission (“SEC”) were inferior officers subject to the Appointments Clause of the United States Constitution)). She concedes she failed to present her claim for error before the ALJ, which has prompted the Commissioner to seek summary denial of the Lucia claim because it was not timely raised and is nonjurisdictional. See Def. Resp. (doc. 13) at 4-14 (citing Lucia, 138 S.Ct. at 2045 (“one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case is entitled to relief”) (internal quotation marks and citation omitted)).

         Although McWilliams's Appointments Clause objection is nonjurisdictional, her claim merits consideration even though not raised below because it impacts the validity of the underlying proceeding, especially in the unique inquisitorial context of Social Security Administration (“SSA”) proceedings. Further, McWilliams raised her objection at the earliest possible opportunity after Lucia was decided, and was not required to preserve her Lucia claim by raising it at the initial administrative level of review. In any event, it would have been futile for McWilliams to raise her claim before the ALJ because the ALJ was powerless to resolve it.[2]

         McWilliams's case is remanded to a different, constitutionally appointed ALJ. Since the ALJ's decision was a nullity based on Lucia, I need not address the merits of her additional claims because a new ALJ must conduct a de novo review on remand.[3]

         I. Background

         McWilliams applied for Disability Insurance Benefits on April 2, 2015, alleging a disability onset date of March 27, 2015. R. at 91. Following a hearing, an ALJ denied McWilliams's claim on December 14, 2017. Id. at 14-16. Applying the five-step sequential analysis, see 20 C.F.R. § 404.1520(a)(4)(i)-(v), the ALJ found McWilliams was not disabled because she could perform jobs available in the national economy, R. at 25.

         The Appeals Council denied McWilliams's request for review, id. at 1-3, and McWilliams filed this case, [4] Compl. (doc. 2).

         II. The ALJ's Authority to Decide the Case


         In 2012, an SEC ALJ found Lucia had violated certain securities laws. Lucia, 138 S.Ct. at 2049. On appeal to the SEC, Lucia argued the ALJ was not properly appointed under the Appointments Clause because the ALJ was appointed by SEC staff members rather than the SEC. Id.; see also U.S. Const., art. II, § 2, cl. 2 (inferior officers must be appointed by “the President, ” “Courts of Law, ” or “Heads of Departments”); Buckley v. Valeo, 424 U.S. 1, 126 (1976) (per curiam) (inferior officers are those individuals who “exercise significant authority pursuant to the laws of the United States”).

         After both the SEC and the United States Court of Appeals for the D.C. Circuit rejected Lucia's argument, the Supreme Court reversed, holding that SEC ALJs are inferior officers subject to the Appointments Clause.[5] Lucia, 138 S.Ct. at 2049, 2055. The Court also held Lucia's argument was “timely” because it had been raised “before the Commission[] and . . . in the Court of Appeals and [the Supreme] Court.” Id. (internal quotation marks and citation omitted). The Court concluded Lucia was entitled to a new hearing before a different, constitutionally appointed ALJ. Id.

         Although Lucia decided the constitutional status of only SEC ALJs, the decision implicated the status of ALJs in other agencies, including the more than 1, 600 ALJs at the SSA. See Br. of Nat'l Org. of Soc. Sec. Claimants' Reps., Lucia v. S.E.C., 138 S.Ct. 2044 (No. 17-130) (April 2, 2018), at *1-2; see also Bandimere v. S.E.C., 844 F.3d 1168, 1200 (10th Cir. 2016), cert. denied sub nom, 138 S.Ct. 2706 (2018) (McKay, J., dissenting) (stating there is no “meaningful difference between SEC ALJs and SSA ALJs under the majority's [decision]”). Unlike the SEC which features an adversarial system, however, SSA ALJs differ in significant respects.

         Unique Nature of SSA Disability Claims Process

         SSA ALJs oversee hearings to determine a claimant's eligibility for benefits. 42 U.S.C. § 405(b)(1). If the claimant receives an unfavorable decision from the ALJ, she may request review by the Appeals Council, 20 C.F.R. § 422.205(a), ...

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