Muhammad v. Berryhill

381 F.Supp.3d 462

Musa Saeed MUHAMMAD, Plaintiff,

v.Nancy A. BERRYHILL, Acting Commissioner of Social Security, Defendant.

CIVIL ACTION NO. 18-172

United States District Court, E.D. Pennsylvania.

Filed May 23, 2019

MEMORANDUM

PAPPERT, District Judge.

Musa Saeed Muhammad seeks judicial review of the Commissioner of Social Security's denial of his application for Disability Insurance Benefits ("DIB") under Title II of the Social Security Act. Muhammad contends, among other things, that the Administrative Law Judge who presided over his hearing lacked the authority to decide his case because she was not appointed in the manner prescribed by the Constitution's Appointments Clause. The Commissioner acknowledges the infirmity of the appointment but contends that Muhammad forfeited his right to assert such a claim by not raising it before the ALJ or any point thereafter in the administrative process. Magistrate Judge Timothy Rice issued a Report and Recommendation ("R & R") in which he concluded that Muhammad had not forfeited his right to challenge the propriety of the ALJ's appointment.

Given that ruling, Judge Rice did not consider the merits of Muhammad's claims; he recommended instead that Muhammad's request for review be granted and the case be remanded to be heard de novo by a new ALJ. (ECF No. 25.) Upon consideration of the Administrative Record,¹ Judge Rice's R & R, the parties' Objections and Responses thereto (ECF Nos. 29 & 35), the Court sustains the Commissioner's objections, overrules the R & R and refers the case back to Judge Rice to address the merits of Muhammad's claims.²

I

Muhammad filed for DIB on January 14, 2014. (Administrative Record ("R.") 91.) His application was initially denied on June 12, 2014. (Id. at 91–102.) Muhammad timely requested a hearing before an ALJ, which was held on April 21, 2016. (Id. at 46–87, 113.) ALJ Susannah Merritt ruled on June 29, 2016 that Muhammad was not disabled. (Id. at 7–25.) In denying his claim, ALJ Merritt found that Muhammad was "capable of making a successful adjustment to other work that exists in significant numbers in the national economy." (Id. at 25.) Muhammad requested review of ALJ Merritt's decision by the Appeals Council on July 13, 2016. (Id. at 166–69.) On July 31, 2017, the Appeals Council denied his request. (Id. at 1–6.) Muhammad was represented by counsel throughout the administrative process.³

On January 17, 2018, Muhammad filed this lawsuit. See (Compl., ECF No. 3). He submitted a brief and statement of issues on June 21, 2018 arguing, among other things, that he proved his inability to return to past work, that the ALJ failed to find his traumatic brain injury severe and overestimated his residual functional capacity and that the ALJ erroneously assigned insignificant weight to the opinion of the treating psychiatrist. (Br. & Stmt. Issues, ECF No. 10.) On July 25, 2018, the Court referred the matter to Judge Rice for an R & R. (ECF No. 12.) On August 13, 2018, almost two and a half years after his hearing before the ALJ, Muhammad filed his reply brief in which he challenged for the first time the constitutionality of ALJ Merritt's appointment. (Reply Br. at 1, ECF No. 15.)

Roughly two months before Muhammad asserted his constitutional challenge, the Supreme Court held in Lucia v. SEC , ––– U.S. ––––, 138 S.Ct. 2044, 201 L.Ed.2d 464 (2018), that the Securities and Exchange Commission's ALJs are "Officers of the United States" within the meaning of the Constitution's Appointments Clause, which states:

[The President]...shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law; but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

Id. at 2051 ; U.S. CONST. , art. II, § 2, cl. 2. Because the ALJ in Lucia had been appointed by SEC staff members, the Court ruled that his appointment was unconstitutional. 138 S.Ct. at 2055. The Court limited relief, however, to those who make " ‘a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case.’ " Id. (quoting Ryder v. United States , 515 U.S. 177, 182–83, 115 S.Ct. 2031, 132 L.Ed.2d 136 (1995) ). It held that the petitioner had timely "contested the validity of [the ALJ's] appointment before the Commission, and continued pressing that claim in the Court of Appeals and this Court." Id. As a result, the Court cured the constitutional error by instructing a different ALJ or the Commission itself to hold a new hearing for the petitioner. Id.

II

Judge Rice recommends that Muhammad's request for review be granted because: (1) although Muhammad's Appointments Clause challenge is nonjurisdictional, it "merits consideration...because it impacts the validity of the underlying proceeding"; (2) Muhammad was not required under Sims v. Apfel , 530 U.S. 103, 120 S.Ct. 2080, 147 L.Ed.2d 80 (2000), to preserve his Appointments Clause challenge by raising it at the initial administrative level of review; (3) even if he was required to preserve the issue, Muhammad was excused from doing so under Freytag v. Commissioner , 501 U.S. 868, 111 S.Ct. 2631, 115 L.Ed.2d 764 (1991), and (4) it would have been futile for Muhammad to raise his claim before an ALJ who was "powerless to resolve it." (R & R at 2–12.) The Commissioner does not contest that SSA ALJs are "inferior officers" who, under the Appointments Clause must be appointed by the President, the Courts or Heads of Departments. (Obj. at 4 n.2, ECF No. 29); see U.S. CONST., art. II, § 2, cl. 2. Rather, the Commissioner contends that Muhammad forfeited his Appointments Clause challenge by failing to raise it at any stage of the administrative process and that Freytag does not "categorically exclud[e such challenges] from general waiver and forfeiture principles." (Obj. at 4–5, 12.)

At the time of the Magistrate Judge's decision in November of 2018, nearly every district court to address this issue in the context of the SSA held that the claimant forfeited his right to challenge the constitutionality of the ALJ's appointment by failing to timely assert such a challenge before the ALJ. See Abbington v. Berryhill , No. CV 1:17-00552, 2018 WL 6571208, at *2 n.7 (S.D. Ala. Dec. 13, 2018) (collecting cases as of December 13, 2018); Fortin v. Comm'r of Soc. Sec. , No. 18-10187, 372 F.Supp.3d 558, 566–68, 2019 WL 1417161, at *6 (E.D. Mich. Mar. 29, 2019) (collecting cases as of March 29, 2019). Some courts have since followed Judge Rice's approach while others have not. Compare Bizarre v. Berryhill , 364 F. Supp. 3d 418, 424 n. 4 (M.D. Pa. 2019), and Culclasure v. Comm'r of Soc. Sec. Admin ., No. CV 18-1543, 375 F.Supp.3d 559, 573–74, 2019 WL 1641192, at *11 (E.D. Pa. Apr. 16, 2019), with Fortin , 372 F.Supp.3d at 565–66, 2019 WL 1417161, at *5, and Bonilla-Bukhari v. Berryhill , 357 F.Supp.3d 341, 350 (S.D.N.Y. 2019).

A

As a threshold matter, the R & R found that Muhammad's Appointments Clause challenge is nonjurisdictional. (R & R at 2.) While a jurisdictional challenge cannot be waived or forfeited, a nonjurisdictional challenge can be. Diane S. P. v. Berryhill , No. 4:17CV143, 379 F.Supp.3d 498, 517–18, 2019 WL 1879256, at *13 (E.D. Va. Mar. 21, 2019). The Supreme Court and several appellate courts have analyzed Appointments Clause challenges as nonjurisdictional. See Freytag , 501 U.S. at 871–72, 111 S.Ct. 2631 (including Appointments Clause objections to judicial officers in the category of "nonjurisdictional structural constitutional objections"); see also N.L.R.B. v. RELCO Locomotives, Inc. , 734 F.3d 764, 795 (8th Cir. 2013) (declining "to depart from Freytag's general rule that [A]ppointments [C]lause challenges are nonjurisdictional"); GGNSC Springfield v. N.L.R.B. , 721 F.3d 403, 405–07 (6th Cir. 2013) (holding errors regarding appointment of officers under Article II are nonjurisdictional). The Court accordingly treats Muhammad's challenge as nonjurisdictional and therefore subject to forfeiture.⁴

A general administrative law principle is that "courts should not topple over administrative decisions unless the administrative body not only has erred but has erred against objection made at the time appropriate under its practice." United States v. L.A. Tucker Truck Lines, Inc. , 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952). "[O]rderly procedure and good administration require that objections to the proceedings of an administrative agency be made while it has an opportunity for correction in order to raise issues reviewable by the courts." Id. The R & R acknowledges that Muhammad did not raise his Appointments Clause challenge with the ALJ or at any point in the administrative process and relies on Sims in declining to "judicially impose" an issue exhaustion requirement. (R & R at 3, 9.)

The issue in Sims was whether an unsuccessful Social Security claimant waived any issues in a later judicial proceeding that he did not present in his request for review to the Social Security Appeals Council. 530 U.S. at 105, 120 S.Ct. 2080. Finding the "requirements of administrative issue exhaustion are largely creatures of statute," the Supreme Court concluded that no statute or regulation within the SSA required issue exhaustion. Id. at 107–08, 120 S.Ct. 2080. It noted that it had previously "imposed an issue-exhaustion requirement even in the absence of a statute or regulation[ ] [b]ut the reason we have done so does not apply here." Id. at 108, 120 S.Ct. 2080. In relying upon the "inquisitorial" nature of the SSA, the Court focused its analysis on the "informal, nonadversary manner" of the Appeals Council review process and its corresponding regulations. Id. at 111, ...