F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUL 20 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
ARMANDO A. CORDOBA;
INDEPENDENT PARALEGAL
SERVICE, INC., doing business as
DISABILITY ADVOCACY CLINIC,
Plaintiffs - Appellants,
v. No. 99-2278
LARRY G. MASSANARI, * Acting
Commissioner of the Social Security
Administration ,
Defendant - Appellee.
NATIONAL FEDERATION OF
PARALEGAL ASSOCIATIONS,
Amicus Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. NO. CIV-96-1393-MV/RLP)
Dennis W. Montoya of Montoya Law Offices, Rio Rancho, New Mexico, for
Plaintiffs-Appellants.
*
On March 29, 2001, Larry G. Massanari became the Acting Commissioner
of Social Security. In accordance with Rule 43(c)(2) of the Federal Rules of
Appellate Procedure, Mr. Massanari is substituted as the appellee in this action.
August E. Flentje, Attorney, Appellate Staff Civil Division, Department of
Justice, Washington, D.C., (David W. Ogden, Acting Assistant Attorney General;
William Kanter, and Howard S. Scher, Attorneys, Appellate Staff Civil Division,
Washington, D.C.; John J. Kelly, United States Attorney, Albuquerque, New
Mexico, with him on the briefs), for Defendant-Appellee.
Martha A. Churchill, Milan, Michigan, filed a brief on behalf of the amicus
curiae.
Before TACHA , Chief Judge, REAVLEY , ** and LUCERO , Circuit Judges.
REAVLEY , Senior Circuit Judge.
Appellants Armando Cordoba and Independent Paralegal Services, Inc.
(collectively Cordoba) provide non-attorney representation to clients seeking
social security benefits. The Social Security Act allows for such non-attorney
representation. See 42 U.S.C. § 406. Cordoba brought this suit after the Social
Security Administration (SSA) rejected numerous fee agreements he had
submitted for approval, resulting in a loss of fees.
The statutory and regulatory scheme which governs the payment of fees to
representatives of social security claimants draws certain distinctions between
attorneys and non-attorneys. For example, the SSA is authorized to pay an
Honorable Thomas M. Reavley, United States Senior Circuit Judge for the
**
Fifth Circuit, sitting by designation.
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attorney his fees directly from the past-due benefits due a claimant. See 46
U.S.C. § 406(a)(4)(A). An SSA regulation provides that the SSA will pay an
attorney his authorized fee directly from past-due benefits, but that the SSA
assumes no responsibility for the payment to a non-attorney of fees it has
authorized. 20 C.F.R. § 404.1720(b)(4) (2000). 1
Cordoba alleged that the statutory and regulatory scheme unconstitutionally
discriminates against non-attorneys, and that certain regulations had been
promulgated in violation of the notice and comment rulemaking requirements of
the Administrative Procedure Act (APA), 5 U.S.C. § 553. The district court
considered challenges to four provisions of the SSA’s “Hearings, Appeals and
Litigation Law Manual” (known as HALLEX). The district court held, and the
Commissioner of Social Security does not contest, that two provisions were
“substantive” rather than “interpretive,” and hence subject to the notice and
comment provisions of the APA. See id. § 553(b)(3)(A) (providing that notice
and comment requirements do not apply to “interpretative rules”); Rocky
Mountain Helicopters, Inc. v. FAA, 971 F.2d 544, 546-47 (10th Cir. 1992)
1
In addition, while attorneys in good standing may without further
qualifications represent claimants, the Commissioner of Social Security prescribes
qualifying rules for non-attorney representatives. 42 U.S.C. § 406(a)(1); 20
C.F.R. § 404.1705(b). Non-attorneys, unlike attorneys, must sign a written notice
of appointment as a claimant’s representative. Id. § 404.1707(b).
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(explaining that notice and comment rulemaking requirements apply to
“substantive” rules but not to “interpretive” rules).
A. Jurisdiction of Cordoba’s Statutory Claims
As we understand Cordoba’s appellate briefing, he complains that the
district court erred in dismissing his substantive constitutional claims, and in
declining to grant certain requested equitable relief once it found a violation of
the APA. 2 We discuss the equal protection claim below. On the claims other than
the constitutional claims, we agree with the district court that the only jurisdiction
it had was limited jurisdiction to issue mandamus relief. Although the case
presents questions of federal law, the Social Security Act provides that “[n]o
action against the United States, the Commissioner of Social Security, or any
officer or employee thereof shall be brought under section 1331 or 1346 of Title
28 to recover on any claim arising under this subchapter.” 42 U.S.C. § 405(h).
Section 405(h) has been broadly interpreted to bar federal district court suits
involving social security claims, where jurisdiction is allegedly based on general
2
The SSA argues that the “equitable” relief Cordoba seeks is in reality a
claim for money damages from the SSA. The SSA contends that such a claim is
barred by the APA, which only allows “relief other than money damages,” 5
U.S.C. § 702, and is also barred by the Social Security Act, which only allows for
the direct payment of fees from the SSA to an attorney, see 42 U.S.C. §
406(a)(4)(A). We do not reach these arguments. We also note the SSA’s
contention that Cordoba has abandoned on appeal his argument below that the
different treatment of attorneys and non-attorneys amounts to an equal protection
violation. We conclude that Cordoba has preserved this argument on appeal.
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federal question jurisdiction. See Weinberger v. Salfi, 422 U.S. 749, 757-62
(1975). Further, in Califano v. Sanders, 430 U.S. 99, 105-07 (1977), the Court
held that the APA does not provide an independent source of subject matter
jurisdiction.
We also agree with the district court that federal court jurisdiction under 42
U.S.C. § 405(g) does not extend to this case. Section 405(g), by its terms, would
only apply if Cordoba were a “party” to a final agency decision of the Social
Security Administration “made after a hearing.” However, § 406(a) sets out the
statutory procedures for non-attorney representatives, and § 406(a)(3)(C) states
that fee determinations by the agency are final. Considering both § 405 and §
406, a claimant’s representative should not be considered a “party” under section
§ 405(g). Further, Cordoba concedes in his supplemental brief that “[s]ection
405(g) review is not available to Mr. Cordoba and Independent Paralegal
Services. The decision on representative fees is made without a hearing, [and]
therefore is ‘not a final decision of the Commissioner made after a hearing’ to
which Appellants were a party.”
On the statutory claims, therefore, the only source of district court
jurisdiction is the limited jurisdiction provided under the federal mandamus
statute, 28 U.S.C. § 1361. We recognized such jurisdiction in Ryan v. Shea, 525
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F.2d 268, 272 (10th Cir. 1975). 3 Such mandamus jurisdiction exists “for a
plaintiff only if he has exhausted all other avenues of relief and only if the
defendant owes him a clear nondiscretionary duty.” Heckler v. Ringer, 466 U.S.
602, 616 (1984).
In ruling on the cross-motions for summary judgment, the district court
properly refused to order the Social Security Administration to approve Cordoba’s
previously denied fee agreements or other requested injunctive relief, because
Cordoba failed to offer proof that he had exhausted all other avenues of relief
before the agency. In particular, the district court noted that, under 20 C.F.R. §
404.1725 (2000), the representative may file a fee petition for a fee award after
the Social Security Administration initially refuses to enforce a fee agreement.
The court noted that Cordoba, in the cross-motions for summary judgment, did
not show that he had pursued this administrative remedy. 4
3
While Ryan also recognized jurisdiction under the APA, a holding
overruled by Sanders, 430 U.S. at 105-07, Ryan’s holding that mandamus
jurisdiction is available remains good law in this circuit.
4
After the court ruled on the cross-motions for summary judgment,
Cordoba filed a motion for reconsideration. As the district court noted, Cordoba
argued that he had submitted fee petitions which had been rejected, but also
argued that pursuing the fee petition process would be inefficient, time-
consuming, and costly, thereby apparently conceding that this process was still
available to him. The district court noted that if Cordoba was saying that he had
filed fee petitions, he should have presented that evidence before the court ruled
on the summary judgment motions. Second, the court noted that Cordoba had still
failed to show why, if he filed a fee petition now, the Commissioner would not be
(continued...)
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B. Jurisdiction of Cordoba’s Constitutional Claim
We are left with Cordoba’s equal protection claim. As discussed above, the
Social Security Act and regulations thereunder draw some distinctions between
attorneys and non-attorneys. Over this constitutional claim, we are persuaded that
the district court had general federal question jurisdiction under 28 U.S.C. §
1331.
Despite the language of § 405(h), discussed above, the Supreme Court has
recognized that general federal question jurisdiction exists over certain
constitutional claims relating to social security matters. Whether an exception to
§ 405(h) exists for colorable constitutional claims was discussed by the Supreme
Court in Califano v. Sanders, 430 U.S. 99 (1977), where the Court, in explaining
prior case law, recognized the “well-established principle that when constitutional
questions are in issue, the availability of judicial review is presumed, and we will
not read a statutory scheme to take the extraordinary step of foreclosing
(...continued)
4
compelled to grant his fee petition in light of the court’s ruling that certain
provisions under which Cordoba’s fee agreements had been rejected were invalid.
We agree with the Commissioner’s appellate brief that “now that the HALLEX
provisions have been invalidated, the appropriate and available forum for
plaintiffs to seek the relief to which they are entitled is through the normal
administrative procedures provided by 20 C.F.R. part 404.1700.” Hence, Cordoba
again failed to show that he did not have an adequate alternative to mandamus
relief. We see no error in the court’s denial of the motion for reconsideration.
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jurisdiction unless Congress’ intent to do so is manifested by clear and convincing
evidence.” Id. at 109 (internal quotation marks omitted).
More recently, in Shalala v. Illinois Council on Long Term Care, Inc., 529
U.S. 1 (2000), the Court addressed whether a district court had federal question
jurisdiction to hear a challenge to certain Medicare regulations. The regulations
allegedly violated constitutional and statutory requirements. Id. at 7. A provision
of the Medicare Act incorporated § 405(h). The Court held that § 405(h) deprived
the district court of federal question jurisdiction. Illinois Council interpreted
Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667 (1986), as
holding that § 1331 federal question jurisdiction would exist if without it
“application of § 405(h) would not simply channel review through the agency, but
would mean no review at all.” Illinois Council, 529 U.S. at 19. Michigan
Academy, however, only recognized a presumption of judicial review, which may
be rebutted by “specific congressional intent to preclude judicial review.” 476
U.S. at 673. In the pending case, § 406(a)(3)(C), discussed above, provides that
review of a fee agreement by an administrative law judge “shall not be subject to
further review,” and arguably manifests congressional intent that there should be
no judicial review of fee determinations.
After careful consideration, however, we are persuaded that the Social
Security Act, and § 406(a)(3)(C) in particular, do not manifest “specific”
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congressional intent under Illinois Council, or “clear and convincing” evidence of
congressional intent under Sanders, that a constitutional claim of the sort Cordoba
raises should not be cognizable in federal court. Section 406(a)(3)(C) concerns
the procedures whereby an administrative law judge reviews the maximum fee
allowed under the fee agreement procedure for obtaining fees. The fee agreement
procedure is one of two procedures whereby fee can be recovered, the other being
the fee petition procedure, see 42 U.S.C. § 406(a)(1); 20 C.F.R. § 404.1725
(2000). We do not read the procedures set out in § 406(a)(3)(C) as manifesting
specific or clear and convincing congressional intent that Cordoba cannot
challenge in federal court, on equal protection grounds, the regulatory scheme
itself, rather than the fee awarded in a particular case under the extant scheme.
See Buchanan v. Apfel, 249 F.3d 485, 490 (6th Cir. 2001) (distinguishing, for
purposes of § 405(h), between “whether Congress intended to preclude review of
challenges to the methods used in making those fee determinations, as opposed to
precluding review of challenges to the individual fee determinations
themselves.”). Further, under Illinois Council, there is no apparent right under
the regulatory scheme to challenge in an administrative proceeding the scheme
itself on equal protection grounds, all the more reason to conclude that Congress
did not intend to foreclose such a challenge in federal district court.
C. The Equal Protection Claim
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While the district court had general federal question jurisdiction to address
the equal protection claim, judicial review of this claim, ultimately, is quite
limited. The differing treatment of attorney and non-attorneys does not involve a
suspect class and is subject to rational basis equal protection analysis. A statutory
classification survives rational basis scrutiny “if there is any reasonably
conceivable state of facts that could provide a rational basis for the
classification,” and under rational basis review, “a legislative choice is not
subject to courtroom fact-finding and may be based on rational speculation
unsupported by evidence or empirical data.” FCC v. Beach Communications,
Inc., 508 U.S. 307, 313, 315 (1993).
The district court and the SSA have provided a number of grounds on
which the Social Security Administration and Congress might rationally treat
lawyers and non-lawyer representatives differently in the adjudication of social
security claims. The district court noted that “there are a number of reasons why
Congress and the SSA could conceivably have chosen to differentiate in this
manner between attorney and non-attorney representatives. The direct payment
method may provide an incentive for attorney representatives. The supervision of
attorneys disciplinary panels provide may have reassured Congress with respect to
possible abuses of the fee paying process.” We also agree with the SSA that
“Congress could have found that it could enlist an adequate number of non-
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attorney representative without resorting to the direct payment incentive it
provided to attorneys.” We are persuaded that the regulatory scheme passes
rational basis equal protection scrutiny.
AFFIRMED.
ENTERED FOR THE COURT
Thomas M. Reavley
Senior Circuit Judge
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Cordoba v. Massanari
Court: Court of Appeals for the Tenth Circuit
Date filed: 2001-07-20
Citations: 256 F.3d 1044
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