Dixon v. Shalala

No. 94-6040 (2d Cir. Apr. 19, 1995) ; Clearinghouse Number: 36027

Description

Second Circuit Upholds Wide-Ranging Relief in Class Action Challenge to Secretary’s Misapplication of the Severity Regulations

Abstract

The Second Circuit has affirmed the district court’s remedial order in this long-standing class action challenging the Secretary of HHS’s practice of denying disability benefits based on a finding that plaintiffs’ impairments were not severe. In 1992, the district court found that the Social Security Administration (SSA) had engaged in systematic and clandestine misapplication of the disability regulations concerning "severe" impairments and had illegally implemented a policy involving "noncombination" of impairments, causing plaintiffs’ disabilities to be classified as "nonsevere" and their applications to be denied without full review. Finding that SSA’s misapplication of the regulations was covert as well as illegal, the court concluded that disability claimants could not reasonably have been expected to know of the practice and equitably tolled the statute of limitations. In its 1993 remedial order, the court retroactively expanded plaintiff class in light of its conclusion on equitable tolling. The court ordered SSA to identify and notify all class members and to reopen and readjudicate the claims of those who responded. The Second Circuit found that the evidence supported the lower court’s finding that SSA had used step 2 of the sequential evaluation process pervasively during the period in question to deny claimants benefits without determining whether their impairments prevented them from engaging in substantial gainful activity. The court rejected SSA’s arguments that plaintiffs had to prove that SSA had acted in bad faith, covertly, or with an intention to evade the law and that plaintiffs’ claims should not be subject to equitable tolling because the policy in question was "public." The court found that tolling was particularly warranted in this case because SSA’s public statements of policy, contained in the Program Operations Manual System and a Social Security Ruling, were themselves systematically misapplied. The court also held that the requirement that SSA "reconstruct" the files of claimants denied benefits under the challenged policy did not constitute an abuse of discretion. In a situation in which, due to a pervasive pattern of error by the government, it is equitable to toll the statute of limitations it would be inconsistent and an exercise in futility not to require also that the government help recover evidence it had destroyed. Finally, the court rejected SSA’s argument that the remedial order should be reversed to the extent that it requires SSA to consider periods subsequent to the denial of the application on which class membership is based if that denial took place before the class action began. The court noted that SSA cannot reasonably expect to limit relief to the now-undocumented period of the original denials because SSA has destroyed most class members’ files.

Additional Information

Attorney Information
Helaine Barnett, Scott Rosenberg, Richard Blum, Legal Aid Society, 11 Park Pl., Rm. 1805, New York, NY 10007, (212) 406-0750; Matthew Diller, Rolando Acosta, Susan Sternberg, Deborah Bigel, Oliver Koppell, Mary Bernet.
Docket Date
1995-04-19 00:00:00+00:00

Files

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