From Ronald Mann
on March 1, 2021
at 3:46 p.m.
Wednesday’s argument in Carr v Saul concerns a surprisingly fundamental issue of administrative law: when applicants in an administrative proceeding (in this case social security) have to raise a specific issue in front of the agency if they want to keep their right to submit that issue Court to discuss review of the agency’s final decision. The Supreme Court has numerous rulings and a well-understood framework for deciding when to file claims in the administrative process, which “exhausts” their administrative resources. For example, it is very clear that social security claimants must first go to the social security administration before going to federal court. But the judges have said little about the clear question of what problems they must pose in exhausting these resources. Carr (along with a consolidated case, Davis v Saul) is giving the court an opportunity to answer that question.
To provide some context, the specific argument Willie Earl Carr (and several other claimants) wish to make is that the administrative judge before whom they filed their application was not empowered to consider their application as the ALJ did not duly appointed. Everyone agrees that the ALJ was, in fact, improperly appointed. That conclusion stems from the 2018 Supreme Court ruling in the Lucia v Securities and Exchange Commission that the procedure for appointing ALJs in the SEC violated the constitution’s appointment clause. The applicants in this case did not address this issue in their administrative proceedings, but raised it when they challenged the agency’s decision after the Lucia decision in a federal court. When the lower courts ruled that applicants were prohibited from requesting a hearing before a duly appointed ALJ, the Supreme Court agreed to review the case.
The argument for applicants is simple: a previous decision denying a requirement of exhaustion of problems in the appeal stage of the agency’s social security process (Sims v. Apfel) should control the decision here. To explain this, decisions by the Social Security Administration are made in three steps. First, the agency decides whether benefits are granted. Second, dissatisfied applicants are entitled to a hearing before an ALJ to review the agency’s decision. Third, applicants who are dissatisfied with the ALJ’s decision can request the SSA Appeals Council to review the ALJ’s decision. In this week’s case, the applicants failed to bring their avoidance clause before the ALJ. In Sims, the applicants failed to raise their dispute before the Appeals Board.
The applicants argue that Sims’ reasoning applies here. Judge Clarence Thomas’s opinion for a multitude suggested that the only source of such a rule would be a judicially implicated doctrine of exhaustion, since no law or regulation obliges applicants to exhaust certain questions before the agency. Since the Appellate Board review is not controversial in the SSA, the plurality found it inappropriate to hold the applicant responsible for failing to identify the litigation-related issues and therefore declined to imply an issue exhaustion rule. Judge Sandra Day O’Connor agreed with the decision, arguing that the SSA’s failure to notify applicants of a problem exhaustion rule made it inappropriate for courts to imply one.
The applicants claim that the same reasoning applies here. There’s no law or regulation yet that requires applicants to exhaust certain questions in front of the agency – in the 20 years since Sims, the SSA hasn’t even proposed such a regulation. Likewise, the proceedings before the ALJ are no more controversial than the proceedings before the Appeals Board – the ALJ is tasked with collecting relevant evidence on behalf of the applicant, investigating the facts and developing arguments on behalf of the applicant. Finally, the Agency does not advise applicants to present all of their issues to the ALJ if they wish to keep them for future litigation.
Generally, applicants indicate that the agency was well aware of the avoidance clause (which was in litigation at the time) but advised ALJs not to address it. Since it would have been pointless for the applicants to bring this claim to the ALJs, the applicants argue that they should not be penalized for failing to do so. Finally, applicants point out that adding problem exhaustion requirements would increase the need for social security applicants to hire an attorney. This would make these procedures and their costs more difficult for applicants who, under the current system, often do not employ a lawyer.
The government is doing its best to dodge Sims. It is argued that the court’s decisions reflect a consistent rule that parties are forfeiting claims they fail to bring before administrative authorities, and primarily refer to the 1952 US decision against LA Tucker Truck Lines. The government argues that Sims does not apply here because applicants play a much more active role before ALJs than they do before the Appeals Council (which has wide discretion as to whether a particular decision should be reviewed). Finally, she rejects the idea that it would have been pointless to raise the challenges in front of the ALJ and contends that if more applicants had brought it to the attention of the Agency, the Agency might have resolved the appointment problem sooner.
My reaction to this case is that the government really wants the court to restrict or withdraw from the Sims. I also think the judges will be reluctant to do something that the agency could so easily do through regulation if they were willing to face the negative attention through judicial implication. Therefore, I find it highly unlikely that Thomas would find the government’s position convincing and expect many of the junior judges to accept his understanding of his own opinion. Only Justice Stephen Breyer remains of the dissidents in Sims, and I don’t really see him pushing hard for a position that only complicates the matter for Social Security claimants. But we’ll know more by Wednesday afternoon.