From Ronald Mann
on March 4, 2021
at 5:20 pm
Sarah Harris argues for applicants in disputes over social security benefits (Art Lien)
Thursday’s argument in Carr v Saul follows the 2018 Supreme Court ruling in Lucia v Securities and Exchange Commission that the process of appointing administrative judges for the SEC violates the constitutional appointment clause. Everyone agrees that the decision in Lucia applies to the ALJs, who settle disputes over social security benefits. The case in court could affect hundreds of applicants whose social security cases have been handled by improperly appointed ALJs. He did not bring up the appointment clause issue in front of the ALJs, but did bring them up when their cases later came before federal court. The government convinced the lower courts that an “issue exhaustion” doctrine prevented the courts from considering the issue of the appointment clause for applicants they did not submit to the ALJ.
The Supreme Court previously denied such a question exhaustion requirement during the appellate stage of the agency’s social security proceeding (in a case called Sims v. Apfel) and allowed applicants to raise questions in court that they had not raised in front of the agency. The Sims Court found that there was no point in imposing a problem exhaustion requirement in a non-controversial process, especially if the government failed to notify applicants of that requirement. The question in Carr is whether Sims applies if the applicant did not raise the issue before the ALJ.
There were no fireworks while Sarah Harris argued on behalf of the plaintiffs. Perhaps the most notable exchange was with Judge Samuel Alito, who questioned the idea that the applicants were harmed by the initial unconstitutional appointment of the ALJs, as the government corrected this constitutional issue by reappointing the same ALJs under the appointment clause below Lucia. “The ALJ was appointed by a subordinate officer and has now been reappointed along with everyone else by the acting commissioner,” said Alito. “Is this ALJ smarter now than he or she was at the time of your hearing? Do you tend to be cheap? “
It seems like a tremendous waste of time and money for Alito to grant hearings before a new ALJ. How … can you explain this to taxpayers and other claimants? If these ALJs will be busy rerolling cases, other claimants who have never had a shot will have to wait. A lot of time is wasted. And I don’t really see what is being achieved. “
The most insightful discussion in Harris’ part of the argument was an exchange with Justice Amy Coney Barrett, who asked if “there are other agencies where this question exhaustion requirement does not apply”. Harris replied that the same rule would apply to the Department of Veterans Affairs and the Railroad Retirement Board, both of which had ordinance imposed problem exhaustion rules. Barrett then underlined this final comment: “So, in these other two agency contexts, the rules for problem exhaustion are imposed by regulation?”
This emphasis on the failure of the Social Security Agency to pass an ordinance requiring exhaustion of the issues dominated the part of the argument that Austin Raynor put forward on behalf of the government. For example, Justice asked Clarence Thomas, the majority opinion writer on Sims, if there was “a regime on exhaustion” without knowing it wasn’t. And then when Raynor admitted that he couldn’t rely on a regulation, Thomas replied that if the duty of exhaustion was “not legal and irregular … what is it based on?” With that in mind, Judge Elena Kagan Raynor recalled that “You told the Sims court, I believe, that the SSA was looking into the issue of exhaustion of the problem. In that opinion, the court expressly stated that the SSA could of course issue a regulation. I mean, if this is so important to SSA, it seems like it didn’t take much effort to get a regulation passed. “
When it was Barrett’s turn again, she elaborated on how illogical it seemed to her to impose an issue exhaustion requirement in a context as non-controversial as the social security hearings:
One of the reasons … in a controversial system, the requirement to exhaust problems makes sense, since both sides have every incentive to raise any problems that would benefit them. In this non-controversial process, what incentive does the applicant have to say to the ALJ, “You know, you cannot, in fact, give me any advantages, and you cannot judge this process because your appointment should have been made under the appointment clause”? Especially if … the applicant is interested in receiving the disability benefits as soon as possible.
We cannot know exactly what the opinion will say. Judge Stephen Breyer, for example, stressed the idea that courts rarely require exhaustion of constitutional claims and that it would have been pointless for claimants to make that particular claim in front of ALJs who were not empowered to resolve it. And Alito could well write separately to emphasize what a waste of resources this is. However, it is quite likely that the judges will rule on behalf of the applicants and that it will not be very long before they do so.