Gilbert v. Sullivan

March 9, 1995
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 93-2309

NORMA GILBERT,
Plaintiff, Appellant,

v.

LOUIS W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES,
Defendant, Appellee.

ERRATA SHEET

The opinion of this Court issued on March 6, 1995 is amended
as follows:

On Page 5, line 15, delete "see, e.g.,"

On Page 5, line 16, delete "see, e.g.,"

On Page 5, line 17, delete "see, e.g.,"

On Page 6, lines 12-13, delete "828 F. Supp. 815 (D.Colo.
1993), aff'd,"

March 6, 1995

[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

No. 93-2309

NORMA GILBERT,

Plaintiff, Appellant,

v.

LOUIS W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ernest C. Torres, U.S. District Judge]

Before

Selya, Boudin and Stahl,
Circuit Judges.

David B. Green on brief for appellant.

Edwin J. Gale, United States Attorney, Stephanie S. Browne,

Assistant United States Attorney, Randolph W. Gaines, Acting

Deputy Chief Counsel for Social Security, A. George Lowe, Deputy

Chief Counsel for Social Security Disability Litigation, and Mary

Ellen Russell, Office of the General Counsel, Social Security

Division, Department of Health and Human Services, on brief for
appellee.

Per Curiam. Claimant Norma Gilbert appeals a district

court judgment affirming the Secretary's refusal to reopen a

prior denial of social security disability benefits.

I
I

In June 1990, Gilbert filed her second application for

social security disability benefits and, after a hearing, was

found to have been disabled since April 30, 1984. A November

1984 application had alleged the same impairment and the same

disability onset date. The 1984 claim was filed without the

assistance of counsel and Gilbert failed to pursue the denial

past the reconsideration stage. As a result, the

reconsidered denial became the final agency determination.

See 20 C.F.R. 404.921. In 1990, Gilbert sought to reopen

the earlier application. Because more than five years had

elapsed between the adverse notification on the first

application and the filing of the current application, the

Administrative Law Judge (ALJ) found no record indication of

fraud or clear error under 20 C.F.R. 404.988(c)(1) or

(c)(8) to warrant reopening the first determination, which

was deemed administratively final. Subsequently, the agency

limited Gilbert's retroactive benefits to June 1989, one year

preceding the second application. See 42 U.S.C. 423(b); 20

C.F.R. 404.621(a)(1)(i).

In district court, Gilbert complained that the Secretary

improperly refused to pay disability benefits from May 1984

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to June 1989 and raised a constitutional challenge to the

reopening refusal. Claimant also contended that there had

been a de facto reopening of the 1984 application.1 The

district court concluded that the ALJ had not reopened the

prior determination and, without reaching the constitutional

question, dismissed the complaint for lack of subject matter

jurisdiction under the authority of Califano v. Sanders, 430

U.S. 99, 108 (1977).2 Gilbert's motion for summary judgment

was also denied, and this appeal ensued.

Our review of a dismissal for lack of subject matter

jurisdiction is de novo. See Shea v. Rev-Lyn Contracting

Co., 868 F.2d 515, 517 (1st Cir. 1989). Reopening decisions

are a matter of agency discretion and generally are not

1. Contrary to claimant's assertions, however, there is no
authority for a de facto reopening "at any time" absent the

narrow exceptions laid out in 404.988(c)(1)-(c)(11). The
Secretary's discretion to reopen cannot be extended beyond
the scope of the regulatory scheme, 20 C.F.R. 404.988, and
all reopenings, whether express or implied, are subject to
those regulatory requirements. Since claimant wholly failed
to identify any fraud or clerical error, 20 C.F.R.
404.988(c)(1),(c)(8), in connection with the first
application, the Secretary lacked discretion to reopen and no
constructive reopening could have occurred. See Coates on

behalf of Coates v. Bowen, 875 F.2d 97, 102 (7th Cir. 1989).

2. The Secretary's motion to dismiss under Fed. R. Civ. P.
12(b)(1) included an affidavit with relevant administrative
decisions attached as exhibits, but without the complete
administrative record. We have indicated before that the
better practice is the routine filing of the entire
administrative record. Torres v. Secretary of HHS, 845 F.2d

1136, 1137 n.1 (1st Cir. 1988). Nonetheless, the limited
record before us is sufficient to decide the essentially
legal question presented here.

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subject to judicial review, but an exception exists if a

colorable constitutional claim is presented. Sanders, 430

U.S. at 109; Dudley v. Secretary of HHS, 816 F.2d 792, 795

(1st Cir. 1987); Carver v. Secretary of HHS, 869 F.2d 289,

292 (6th Cir. 1989) ("[C]ourts have consistently upheld the

imposition of the doctrine of administrative res judicata in

social security cases except under circumstances that

implicate a colorable constitutional issue."). Gilbert

argues that the denial notices given when she was proceeding

pro se on the first application did not explain the

consequences of reapplying for benefits rather than seeking

further administrative review, and therefore violated her

procedural due process rights.3

Gilbert relies on Gonzalez v. Sullivan, 914 F.2d 1197,

1203 (9th Cir. 1990), which held that the initial denial

3. Procedural due process in the social security context
requires no more than an opportunity to be heard "`at a
meaningful time and in a meaningful manner.'" Mathews v.

Eldridge, 424 U.S. 319, 333 (1976) (quoting Armstrong v.

Manzo, 380 U.S. 545, 552 (1965)).

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notice Gonzalez received violated due process.4 In

pertinent part, the denial notice in Gonzalez informed:

If you do not request reconsideration of your case
within the prescribed time period, you still have
the right to file another application at any time.

Id. The Gonzalez court found that notice constitutionally

infirm because it failed to inform how to appeal a denial:

[T]he form of the notice used here is sufficiently
misleading that it introduces a high risk of error
into the disability process. . . . The notice given
in this case does not clearly indicate that if no
request for reconsideration is made, the
determination is final. We conclude that the
notice violates appellant's fifth amendment right
to due process.

Id.

Other courts have recognized that the particular notice

form used in Gonzalez poses serious due process concerns.

See, e.g., Day v. Shalala, 23 F.3d 1052, 1065-66 (6th Cir.

1994); Aponte v. Sullivan, 823 F. Supp. 277, 282 (E.D.Pa.

1993); Christopher v. Secretary of HHS, 702 F. Supp. 41, 43

(N.D.N.Y. 1989); Butland v. Bowen, 673 F. Supp. 638, 641

(D.Mass. 1987); Aversa v. Secretary of HHS, 672 F. Supp. 775,

777 (D.N.J. 1987); Dealy v. Heckler, 616 F. Supp. 880, 887

4. The Gonzalez decision became the subject of the

Secretary's Acquiescence Ruling 92-7(9) (published September
30, 1992). According to the ruling, claimants who received a
Gonzalez notice before July 1, 1991 and did not appeal, but

subsequently filed another application that either requested
a reopening of the prior determination or requested some or
all of the benefits then claimed, were entitled to a new
determination based on the merits of their claim without
regard for the usual time limits imposed upon reopening
requests.

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(W.D.Mo. 1984); see also Burks-Marshall v. Shalala, 7 F.3d

1346, 1349 (8th Cir. 1993) (dictum).5

Gilbert's notice is not available, but the Secretary

concedes that it is substantially the same as that rejected

in Gonzalez. As it is undisputed that claimant received the

kind of Gonzalez notice that courts have uniformly recognized

as inadequate, we find that Gilbert has proffered a colorable

constitutional claim and the district court had jurisdiction

to review the denial of reopening.

II
II

The Secretary argues, however, that Gilbert's due

process claim is not colorable because she has not

demonstrated that she forfeited her right to appeal the prior

denial in reliance on the notice. The question was not

discussed in Gonzalez, but we believe that reliance on the

defective notice is a core ingredient of claimant's prima

facie showing of a due process deprivation. "Without such

reliance, the injury is not fairly traceable to the

challenged action." Gilbert v. Shalala, F.3d , 1995 WL

16762, *2 (10th Cir. Jan. 17, 1995). Only claimants who

detrimentally relied on an inadequate notice could have been

5. In Gilbert v. Shalala, 828 F. Supp. 815, 816 (D.Colo

1993), aff'd, F.3d , 1995 WL 16762 (10th Cir. Jan. 17,

1995), the court reached a different conclusion, but there,
the allegedly deficient Gonzalez notice also contained this

language: "A new application is not the same as an appeal of
this determination."

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injured by it and were entitled to reopen their applications.

Day, 23 F.3d at 1066; see also Burks-Marshall, 7 F.3d at

1349; Delyria v. Shalala, 856 F. Supp. 1432, 1443 (D.Or.

1994); Butland, 673 F.Supp. at 642; Dealy, 616 F. Supp. at

886; cf. Air Line Pilots Ass'n v. Precision Valley Aviation,

Inc., 26 F.3d 220, 226 (1st Cir. 1994) (party invoking unique

circumstances exception to untimely notice of appeal must

show that detrimental reliance on judicial statement or

action was objectively reasonable); Jimenez-Nieves v. United

States, 682 F.2d 1, 4 (1st Cir. 1982) (justifiable reliance

upon a representation--taking action or refraining from it--

is an essential element of the tort of negligent

misrepresentation). Thus, to succeed on the merits of her

constitutional claim, Gilbert must show that she relied on

the flawed notice and was prejudiced.

Day, 23 F.3d at 1066, assigned essentially objective

criteria by which to assess whether or not a claimant had

established injury because of reliance upon erroneous

information: those claimants who received an inadequate

denial notice, reapplied (rather than appealing the prior

denial), and were met with either a res judicata defense or a

reduced award had detrimentally relied on the faulty notice.

See id. & n.17; see also Delyria, 856 F. Supp. at 1439-40.

We agree, in the circumstances presented here, that the

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detrimental reliance test governs the showing claimant must

make to succeed on her procedural due process claim.

Parsing Day's formulation, undisputed historical facts

of record support a finding of detrimental reliance in this

case. Gilbert was denied benefits on her prior pro se

application; she received an admittedly defective Gonzalez-

type notice, and, acting in conformity with the notice, filed

a new application requesting a reopening. She later

testified that she did not know how to appeal the prior

denial. That Gilbert did not appeal but instead chose to

reapply for the same benefits evidences her reliance on the

Secretary's erroneous advice. See n.4, supra. Upon

redetermination, Gilbert received retroactive benefits

reduced to one year and suffered the loss of almost five

years of benefits. Since the record indicates both reliance

on erroneous advice and concomitant actual harm, we conclude

that the Secretary's refusal to reopen violated claimant's

due process rights.

If the 1990 application had been claimant's first,

payment of retroactive disability benefits would clearly be

limited to one year prior to the application. 42 U.S.C.

423(b); 20 C.F.R. 404.621(a)(1); Crady v. Secretary of HHS,

835 F.2d 617, 619-20 (6th Cir. 1987). Since we conclude that

claimant has interposed a meritorious constitutional claim,

the procedural bar to reopenings after four years is lifted,

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and the relevant application date for retroactive benefits

purposes would be the onset date claimed in the first

application. See, e.g., Ferguson v. Sullivan, 718 F. Supp.

1269, 1271-72 (W.D.N.C. 1989) (constitutional interest

implicated by claimant's mental incapacity to pursue

administrative appeal required that disability benefits be

calculated from previous application); see also Culbertson v.

Secretary of HHS, 859 F.2d 319, 322-24 (4th Cir. 1988)

(similar). The award of one year of retroactive benefits is

too skimpy and benefits must be calculated from the April 30,

1984 disability date.

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III
III

Ordinarily, having decided that the district court had

jurisdiction to review the reopening denial, we would remand

for further consideration below and not address the merits of

the case. In the distinctly unusual circumstances of this

case, where the record is for all practical purposes

complete, where the Secretary's concession regarding the

critical notice language is conclusive as to the content of

claimant's notices, and where Gilbert's reliance is

sufficiently evidenced in the record to enable this court to

decide the largely legal question whether the Secretary's

reopening rules should be relaxed, a remand is not required.

See Guglietti v. Secretary of HHS, 900 F.2d 397, 399 (1st

Cir. 1990); see also Young v. Bowen, 858 F.2d 951, 956 (4th

Cir. 1988); King v. Commissioner, 458 F.2d 245, 249 (6th Cir.

1972).

We conclude that the Secretary could not

constitutionally refuse to reopen Gilbert's first application

and that claimant should have been awarded disability

benefits for the period commencing April 30, 1984. The

judgment of the district court is reversed and the case is

remanded with instructions to return the case to the

Secretary for an award of disability benefits from April 30,

1984.

Reversed and remanded.

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