Goodnight v. Shalala

837 F. Supp. 1564

David L. GOODNIGHT, Dorothy Dominguez, Brent Richardson, Eugene J. Banks, Everett S. Rossborough, Sr., John H. Harvey, and Alyce M. Goodliffe, on behalf of themselves and all others similarly situated, Plaintiffs, v. Donna SHALALA, M.D., in her official capacity as Secretary of Health and Human Services; Scott Bean, in his official capacity as State Superintendent of the Office of Education; Blaine Peterson, in his official capacity as Executive Director of the Utah Office of Rehabilitation; and Charles Schmitt, in his official capacity as Administrator of the Division of Disability Determination Services, Defendants.

No. 92-C-279W.

United States District Court, D. Utah, C.D.

October 27, 1993.

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Michael E. Bulson, Utah Legal Services, Inc., Ogden, UT, Kay Kosow Fox, Utah Legal Services, Inc., Salt Lake City, UT, Maureen Cleary, Salt Lake City, UT, for plaintiffs.

Jan Graham, Atty. Gen., John S. McAllister, Asst. Atty. Gen., Salt Lake City, UT, for State defendants.

John R. Niemeyer, Brian G. Kennedy, Trial Attys., U.S. Dept. of Justice, Civil Div., Washington, DC, for Secretary defendant.

WINDER, Chief Judge.

This matter is before the court on the Motion to Dismiss for lack of subject matter jurisdiction brought by Defendant Donna Shalala, M.D. (the "Secretary"); the Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief may be granted brought by Defendants Scott Bean, Blaine Peterson, and Charles Schmitt (the "State Defendants"); and on the Motion for Class Certification brought by Plaintiff David Goodnight, et al. ("Plaintiffs"). A hearing on all three motions was held on June 29, 1993. At the hearing, the Secretary was represented by John R. Niemeyer, the State Defendants were represented by John S. McAllister, and Plaintiffs were represented by Michael E. Bulson, Maureen L. Cleary, and Kay Kosow Fox. Before the hearing, the court considered carefully the memoranda and other materials submitted by the parties. Since taking the matter under advisement, the court has further considered the law and facts relating to all motions. Now being fully advised, the court renders the following Memorandum Decision and Order.

I. BACKGROUND

Pursuant to the Social Security Act (the "Act"), the Federal Government provides benefits to disabled persons under two programs administered by the Social Security Administration (the "SSA"). The Social Security Disability Insurance Program ("Title II" or "SSDI"), codified at 42 U.S.C.A. §§ 401-33 (West 1991 & Supp.1993), pays benefits to disabled persons who have contributed to the program and who suffer from a mental or physical disability. The Supplemental Security Income Program ("Title XVI" or "SSI"), codified at 42 U.S.C.A. §§ 1381-83 (West 1991 & Supp.1993), provides benefits to indigent disabled persons. Both statutes define "disability" as the inability "to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months...." Id. §§ 423(d)(1)(A), 1382c(a)(3)(A). An individual is found to be disabled "only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy." Id. §§ 423(d)(2)(A), 1382c(a)(3)(B).

Pursuant to statutory authority, see 42 U.S.C.A. § 405(a), the Secretary has adopted detailed regulations governing eligibility for SSDI, see 20 C.F.R. Part 404, Subpt. P (1993), and SSI benefits. See id. § 416, Subpt. I (1993). The regulations for both programs are essentially the same. At each level of review, a claimant's application for disability benefits is evaluated according to a five-step "sequential evaluation" process. Id. §§ 404.1520, 416.920. The first step is to determine whether the claimant is engaged in "substantial gainful activity." Id. §§ 404.1520(a), (b), 416.920(a), (b). If so, benefits are denied. Id. If the claimant is not engaged in such activity, the second step is to determine whether the claimant's impairment or combination of impairments is "severe" —significantly limiting the claimant's physical or mental ability to do basic work activities. Id. §§ 404.1520(c), 416.920(c). If the impairment is not severe, benefits are denied. Id. If the impairment is severe, the third step is to ascertain whether the claimant's impairment satisfies the durational requirement and is included in the "Listing of Impairments" (the "Listings") contained in 20 C.F.R. Part 404, Subpt. P, App. 1. If not specifically listed, the impairment or combination of impairments can "equal" a listed impairment. Id. §§ 404.1520(d), 416.920(d). The Listings consist of specified impairments acknowledged by the Secretary to be of sufficient severity to preclude gainful work activity. If a claimant's condition satisfies the durational requirement and meets or equals the level of severity of a listed impairment, the claimant is conclusively presumed to be disabled and entitled to benefits. Id. If the claimant's impairment does not meet or equal the severity of a listed impairment, the fourth step is to assess the individual's "residual functional capacity" ("RFC"); this assessment measures what a claimant can still do despite the claimant's impairments. If the claimant's RFC permits performance of the claimant's prior work, benefits are denied. Id. §§ 404.1520(e), 416.920(e). If the claimant is not capable of doing her past work, a decision is made under the fifth and final step whether, in light of her RFC, age, education, and work experience, the claimant has the capacity to perform other work. Id. §§ 404.1520(f), 416.920(f). If the claimant does not have the capacity to perform other work, the claimant will be found disabled. Id.

Whether an individual is disabled is initially determined by a state agency, pursuant to regulations, guidelines, and standards established by the Secretary.¹ 42 U.S.C.A. §§ 421(a), 1383b(a); 20 C.F.R. §§ 404.1503, 416.903 (1993). In the case at bar, the agency is the Utah Division of Disability Determination Services (the "Utah DDDS").² If a claimant is dissatisfied with the initial decision of the Utah DDDS, the claimant is afforded a three-stage administrative review process, beginning with de novo reconsideration by the Utah DDDS. See 20 C.F.R. §§ 404.909(a)(1), 416.1400, 416.1409(a). If a claimant is dissatisfied with the Utah DDDS's decision on reconsideration, the claimant is entitled to a de novo hearing by an administrative law judge ("ALJ") within SSA's Office of Hearings and Appeals. 42 U.S.C.A. §§ 421(d), 1383(c)(1); 20 C.F.R. §§ 404.929, 416.1429, 422.201-422.210. If the ALJ's decision is adverse to the claimant, the claimant may then seek review by the Appeals Council. 20 C.F.R. §§ 404.967, 416.1467. Proceeding through these three stages exhausts the claimant's administrative remedies. Following the determination at each stage, dissatisfied claimants are notified that they must proceed to the next stage within sixty days of notice of the action taken or the decision will be considered binding. See, e.g., 42 U.S.C.A. § 405(b)(1); 20 C.F.R. §§ 404.905, 404.909(a)(1), 404.955(a), 404.968(a)(1), 416.1405, 416.1409(a), 416.1433(b), 416.1455(a), 416.1468(a). Thereafter, claimants may seek judicial review in federal district court under 42 U.S.C.A. § 405(g). See 42 U.S.C. §§ 421(d), 1383(c)(3); 20 C.F.R. §§ 404.981, 416.1400(a)(5) 416.1481, 422.210.

The issue in the instant case concerns the policies and practices of the Utah DDDS in evaluating applications for disability benefits at the initial and reconsideration levels. In their First Amended Complaint, Plaintiffs have alleged that the Secretary and the State Defendants (collectively, "Defendants") have "established a system of policies and a pattern of practice by which initial applications are denied on the basis of illegal and restrictive policies, procedures and standards." First Am.Compl. ¶ 2. Plaintiffs contend that Defendants deny applications for SSDI and SSI benefits without an individual assessment of the applicant's disability. Specifically, Plaintiffs allege that Defendants

apply illegal and restrictive policies and practices; that they fail to make full medical assessments; fail to apply properly the Listing of Impairments contained in 20 C.F.R. Subpart P, Appendix 1; fail to develop necessary medical evidence; fail to consider properly all relevant medical and nonmedical evidence; fail to apply properly the Medical-Vocational Guidelines contained in 20 C.F.R. Subpart P, Appendix 2; fail to consider properly the effect of the combined impairments a claimant suffers; fail to apply properly the 12-month durational requirements; fail to make disability determinations based on residual functional capacity evaluations made by physicians and fail to give proper notice to claimants.

Id. These policies and practices, Plaintiffs argue, directly contradict the Social Security Act, federal regulations, federal case law, the United States Constitution, Social Security Rulings, and the Program Operations Manual System. Plaintiffs maintain that Defendants' policies and practices result in two disability standards for claimants: an "illegal standard applied by the State Defendants at the initial and reconsideration stages" and a "correct standard applied at the hearing and Appeals Council levels by the Secretary." Id. ¶ 3. Because the standards are applied correctly at the federal level, Plaintiffs' only challenge to the Secretary is that she has failed to assure compliance with federal disability law by the State Defendants.

Plaintiffs do not challenge specific...