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Hill v. Saul

United States District Court, E.D. Pennsylvania

August 5, 2019

WILLIAM FRANK HILL, JR., Plaintiff,
v.
ANDREW M. SAUL, [1]Commissioner of Social Security, Defendant.

          MEMORANDUM OPINION

          DAVID R. STRAWBRIDGE UNITED STATES MAGISTRATE JUDGE

         Plaintiff William Frank Hill, Jr. appeals the decision of the administrative law judge (“ALJ”) denying his claim for supplemental security income (“SSI”). He argues, among other things, that the ALJ who presided over his administrative hearing was not properly authorized to act under the Appointments Clause of the United States Constitution, see U.S. CONST. art. II, § 2, cl. 2, and that he is entitled to remand for his case to be heard before a constitutionally appointed ALJ. The Commissioner agrees that the ALJ's appointment was constitutionally deficient, but asserts that Hill has forfeited judicial review of this claim by failing to raise it at the administrative level. We disagree. Accordingly, we will remand this matter for a new hearing before a different, constitutionally appointed ALJ.[2]

         I. FACTUAL AND PROCEDURAL HISTORY

         Hill filed an application for SSI on June 11, 2015. (Doc. 9 at 169-76) (hereinafter “R.”). His claims were initially denied on October 10, 2015. (R. 96.) He requested a hearing before an ALJ. His request was granted, and a hearing was held on November 30, 2017. He appeared, represented by counsel, and testified as to why he believed he was disabled. (R. 36-77.) In a written decision dated January 24, 2018, the ALJ denied Hill's application for benefits. (R. 70.) He requested review by the Social Security Appeals Council, which denied his request on November 5, 2018, rendering the ALJ's decision the “final decision” of the Commissioner for purposes of judicial review. (R. 1-3); see 42 U.S.C. § 405(g); 20 C.F.R. § 404.981. At no point during the administrative process was the constitutionality of the ALJ's appointment called into question.

         Hill commenced this action on December 27, 2018 and filed his brief in support of his request for review on May 1, 2019. (Doc. 11) (“Pl. Br.”). The Commissioner filed its response on May 29, 2019 (Doc. 12) (“Def. Br.”), to which Hill filed a reply on June 8, 2019 (Doc. 13) (“Reply”). The Commissioner filed a Motion to Stay on June 18, 2019 (Doc. 14), which Hill opposed in a response filed the same day. (Doc. 15.) We deny the Motion to Stay for the reasons set out in a footnote order accompanying this opinion. The appeal is fully briefed and ripe for resolution.[3]

         II. DISCUSSION

         Hill raises three claims of error, two which go to the merits of the ALJ's decision and one which raises the question of the ALJ's failure to be properly appointed under the Appointments Clause of the United States Constitution, U.S. CONST. art. II, § 2, cl. 2. This constitutional claim relies on the United States Supreme Court's holding in Lucia v. SEC that the Securities and Exchange Commission (“SEC”) ALJs are “Officers of the United States” subject to the Appointments Clause. 138 S.Ct. 2044, 2049 (2018). Under the Appointments Clause, only the President, “Courts of Law, ” or “Heads of Departments” can appoint “Officers.” U.S. CONST. art. II, § 2, cl. 2. As none of those actors had appointed the SEC ALJs in Lucia, the Supreme Court held that the appointment was in violation of the Clause.

         Lucia's reasoning has been applied to other ALJs, requiring that they, as “inferior officers, ” be appointed according to the Appointments Clause. See, e.g., Bank of Louisiana v. FDIC, 919 F.3d 916, 921 (5th Cir. 2019) (FDIC ALJs); Jones Bros., Inc. v. Sec'y of Labor, 898 F.3d 669, 679 (6th Cir. 2018) (Department of Labor Federal Mine Safety and Health Review Commission ALJs); Island Creek Coal Co. v. Wilkerson, 910 F.3d 254, 257 (6th Cir. 2018) (Department of Labor Benefits Review Board ALJs). Applying this argument to SSA ALJs, Hill seeks remand to a different, constitutionally appointed ALJ, as the Supreme Court required in Lucia. 138 S.Ct. at 2055. The Commissioner concedes that the SSA ALJ who presided over Hill's hearing was not constitutionally appointed.[4] The Commissioner asserts, however, that Hill forfeited his claim by failing to raise it during his administrative proceedings. Hill argues that he was not required to raise this constitutional claim at the administrative level. The question before us is therefore limited to whether Hill “timely” raised his Appointments Clause challenge such that we may consider it upon judicial review.

         A. The general rule, its exceptions, and its application to SSA proceedings

         We accept that, as a general rule, a nonjurisdictional legal claim must first be presented to the lower court if it is to be considered on appeal. In applying this proposition to the SSA ALJ Appointments Clause challenges, some courts have relied upon the limited language in the Supreme Court's Lucia opinion, which provides that “one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case is entitled to relief.” 138 S.Ct. at 2055 (internal quotation marks and citation omitted); see McWilliams v. Berryhill, No. 18-5180, 2019 WL 2615750, at *7 (E.D. Pa. June 16, 2019) (collecting cases). These courts have summarily rejected SSA ALJ Appointments Clause challenges not raised at the ALJ administrative level. See, e.g., Garrison v. Berryhill, 17-302, 2018 WL 4924554, at *2 (W.D. N.C. Oct. 10, 2018) (“To the extent Lucia applies to Social Security ALJs, Plaintiff has forfeited the issue by failing to raise it during his administrative proceedings.”). We believe, as do a growing number of courts, that this emphasis on Lucia's timeliness language is misplaced and should not lead to a summary rejection of Appointments Clause challenges not raised at the ALJ administrative level. We observe that there was neither a timeliness nor exhaustion question raised as to Lucia's constitutional challenge given that he raised it before the SEC's appellate body and in federal court. See Bizarre v. Berryhill, 364 F.Supp.3d 418, 420-21 (M.D. Pa. March 4, 2019), appeal docketed, No. 19-1773 (3d Cir. Apr. 17, 2019); see also Associated Mortgage Bankers, Inc. v. Carson, 2019 WL 108882, at *5 (D.D.C. Jan. 4, 2019) (“Lucia did not define the scope of what constitutes a timely challenge, as there was no claim in Lucia that the challenge . . . was not timely raised.”). In that respect, we are unwilling to accept the Commissioner's invitation to read Lucia as imposing a bright-line timeliness requirement on Appointments Clause challenges. As the court noted in Bizarre, “[t]he [Lucia] majority's statement as to timeliness was not a bright-line demarcation . . . it simply confirmed the obvious timeliness of the fully preserved and exhausted claim as presented.” 364 F.Supp.3d at 420-21. Our inquiry therefore must go beyond Lucia.

         In Freytag v. C.I.R, the Supreme Court carved out an exception to the general rule that nonjurisdictional claims are forfeited if not raised during lower court proceedings. 501 U.S. 868, 878-80 (1991). Even though the petitioner had failed to raise his Appointments Clause challenge before the special trial judge of the United States Tax Court in the underlying proceeding, the Supreme Court concluded that “Appointments Clause objections to judicial officers [are] in the category of nonjurisdictional structural constitutional objections that [can] be considered on appeal whether or not they were ruled upon below.” Id. at 878-79 (citing Glidden Co. v. Zdanok, 370 U.S. 530, 535-36 (1962)). The Court's conclusion was based on its observation that the petitioner's constitutional challenge was “neither frivolous nor disingenuous” and “goes to the validity of the very proceeding under review.” Id. at 879. While acknowledging that “as a general matter, a litigant must raise all issues and objections at trial, ” the Court found that “the disruption to sound appellate process entailed by entertaining objections not raised below does not always overcome what Justice Harlan called ‘the strong interest of the federal judiciary in maintaining the constitutional plan of separation of powers.'” Id. (citing Glidden, 370 U.S. at 536). On those bases, the Court found the petitioner's untimely Appointments Clause challenge to be “one of those rare cases” in which judicial review was appropriate. Ibid.

         Since Freytag, the Supreme Court “has proceeded on a case-by-case basis, determining whether the circumstances of the particular case warrant excusing the failure to timely object.” See In re DBC, 545 F.3d 1373, 1380 (Fed. Cir. 2008). In light of the unique nonadversarial nature of SSA proceedings, we are persuaded that they constitute “those rare cases” in which judicial review is appropriate.

         As a threshold matter, we recognize that the alleged defect in the SSA ALJ's appointment “impacts the validity of the proceeding” in that the ALJ, whose adjudication constitutes the “final decision” of the Commissioner, see 42 U.S.C. § 405(g), is an administrative officer not appointed in accordance with the United States Constitution. Adjudications conducted by such officers are nullities subject to rehearing. See Lucia, 138 S.Ct. at 2055.

         In its discussion regarding the timeliness of the petitioner's constitutional claim, the Freytag Court was concerned principally with the “disruption to sound appellate process” posed by entertaining a claim not raised at trial. 501 U.S. at 879. As the court noted in Bizarre, however, “it is not clear that the Freytag Court contemplated exhaustion within administrative agencies” in its evaluation ...


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