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HUDSINUS v. HECKLER

May 30, 1984

HELEN HUDSINUS, Plaintiff,
v.
MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant



The opinion of the court was delivered by: FISHER

 This action challenges the Constitutionality of the requirement that recipients of Supplemental Security Income (SSI) benefits must apply for, and accept, Social Security retirement benefits at age 62. As a result of complying with this requirement, plaintiff's cash income was increased beyond the eligibility level for SSI benefits. Plaintiff's ineligibility for SSI benefits caused her to lose collateral benefits, including Medicaid, that are available only to the "categorically needy." *fn1" This mandated shift in the source of plaintiff's benefits at age 62 eliminates her Medicaid coverage three years before she will become eligible for Medicare. Plaintiff alleges that the required shift from SSI to retirement benefits violates due process and equal protection, and thwarts the purpose and intent of the Social Security Act.

 JURISDICTION

 Judicial review of final decisions by the Secretary of Health and Human Services is founded upon § 205(g) of the Social Security Act, as amended, 42 U.S.C. § 405(g). That section states, in pertinent part, that the United States District Court "shall have the power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying or reversing the decision of the Secretary, with or without remanding the cause for a rehearing. The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive. . . . " 42 U.S.C. § 405(g).

 In addition to this jurisdiction under the Social Security Act, plaintiff alleges federal question jurisdiction under 28 U.S.C. § 1331 for her Constitutional claims. In Weinberger v. Salfi, 422 U.S. 749, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975), the United States Supreme Court held that 42 U.S.C. § 405(h) *fn2" precludes federal question jurisdiction over suits which seek to recover Social Security benefits. 422 U.S. at 756-62. Section 405(h) does not bar Constitutional challenges, but requires that they be brought under jurisdictional grants contained in the Social Security Act. 422 U.S. at 762. Section 405(g) authorizes judicial review of the decision of the Secretary, but does not state whether that review comprehends the consideration of Constitutional questions.

 Under the Administrative Procedure Act (APA), the scope of judicial review of administrative action includes the authority to "hold unlawful and set aside agency action, findings, and conclusions found to be . . . contrary to constitutional right, power, privilege, or immunity." 5 U.S.C. § 706 (2) (B). Several district court decisions in other jurisdictions have held that the APA must be read in pari materia with the Social Security Act on the subject of judicial review. *fn3" Noting these decisions, the Third Circuit Court of Appeals concluded that "the standard of review in the APA is precisely the same standard of judicial review appearing as Section 205(g) of the Social Security Act [i.e., 42 U.S.C. § 405(g)]." Ginsburg v. Richardson, 436 F.2d 1146, 1148 n.1 (3d Cir. 1971). This conclusion is in conformity with the opinions of the United States Supreme Court deciding Constitutional challenges under § 405(g) jurisdiction. See e.g., Heckler v. Mathews, 465 U.S. 728, 79 L. Ed. 2d 646, 104 S. Ct. 1387 (1984); Weinberger v. Salfi, 422 U.S. 749, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975). Plaintiff's Constitutional challenges therefore may be considered as part of the Section 405(g) review. No independent jurisdictional basis is required.

 The jurisdictional statement in the complaint also cites the Declaratory Judgment Act, 28 U.S.C. § 2201. This Act enlarges the range of remedies available in the federal courts, but it is not on independent source of federal jurisdiction. E.g., Schilling v. Rogers, 363 U.S. 666, 4 L. Ed. 2d 1478, 80 S. Ct. 1288 (1960); Ragoni v. United States, 424 F.2d 261 (3d Cir. 1970).

 Jurisdiction over this action therefore is founded solely upon 42 U.S.C. § 405(g).

 PROCEDURAL HISTORY

 Plaintiff apparently began receiving SSI benefits in early 1981 on the basis of her medical disability. (Tr. 63). These benefits were in the amount of approximately $51.00 per month (Tr. 51). It is alleged that plaintiff called the Social Security Office in Newton, New Jersey on or about November 1981 to ask whether she would continue to receive Medicaid after reaching age 62 in January 1982. As a result of this call, plaintiff allegedly visited the Social Security Office and was told that she must apply for Social Security retirement benefits.

 An application for retirement benefits based on her own earnings record was completed by plaintiff and an award certificate was issued on December 15, 1981. (Tr. 49). This certificate indicates that, beginning in February 1982, plaintiff would be entitled to a monthly retirement benefit on her own record of $99.70 (Tr. 49). This certificate also states that "the benefit being awarded is the only type of benefit to which you are entitled, with the possible exception of wife's benefits." (Tr. 49).

 A second award certificate, dated January 27, 1982, states that plaintiff would be entitled to a monthly wife's benefit of $104.00, for a combined total monthly Social Security retirement benefit of $203.70. (Tr. 50). With the receipt of these retirement benefits, plaintiff's income exceeded the allowable limit for SSI eligibility. (Tr. 9). Plaintiff's SSI benefits therefore were terminated. (Tr. 9).

 After plaintiff became ineligible for SSI benefits, the State of New Jersey advised her that she could no longer receive Medical coverage and other benefits available only to the "categorically needy." *fn4" Plaintiff then filed a request for reconsideration of the Secretary's decision terminating her SSI benefits. (Tr. 51). A reconsideration conference was held and the termination of plaintiff's SSI benefits was affirmed on the ground that an SSI recipient " must apply for other types of benefits (including Social Security) for which he or she may be eligible." (Tr. 53).

 On July 27, 1982, plaintiff filed a request for a hearing before an administrative law judge (ALJ) (Tr. 25), and a hearing was held on October 14, 1982. (Tr. 31-48). In her decision dated December 30, 1982. The ALJ stated that she was constrained to uphold the termination of plaintiff's SSI benefits:

 
There is no doubt that claimant's due process rights have been violated, and that 42 U.S.C. 1320 b-3 created an unequal classification in violation of the Fifth Amendment to the U.S. Constitution. It is also clear that the ultimate effect of the regulations at issue herein result in the purpose of the Act being defeated. However, the undersigned is in the unfortunate position of being without the power to rectify this inequity. As an Administrative Law Judge appointed under Title 5 of the U.S. Code, I have no authority or jurisdiction to rule on questions of constitutionality. I am therefore constrained to deny claimant's application. I find that the regulations, as they exist were correctly applied. The claimant had no choice but to apply for Title II benefits, and when her income exceeded $441.49 per month, her SSI benefits were terminated in accordance with the regulations.

 (Tr. 10).

 The decision of the ALJ became the final decision of the Secretary when it was approved by the Appeals Council on April 13, 1983 (Tr. 3). The Appeals Council did not address the Due Process and Equal Protection issues noted in the ALJ's decision.

 NEW EVIDENCE

 Appended to the defendant's notice of motion for summary judgment is an affidavit of Gregory Machler, Director of Assistance Programs of the Social Security Administration, Department of Health and Human Services, Region II. An affidavit executed by the plaintiff on December 23, 1983 has also been filed in this action.

 Judicial review under 42 U.S.C. § 405(g) is limited to a review of "the pleadings and transcript of the record." In regard to new evidence, section 405(g) states that:

 
The court may, . . . at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding; and the Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based.

 42 U.S.C. § 405(g).

 The court may order the Secretary to consider additional evidence on remand, but the court cannot make findings of fact based on new evidence not considered by the Secretary. Since the affidavit of Gregory Machler contains information never submitted to the Secretary, the proper procedure generally would be to remand this case upon a showing of good cause for the failure to present this evidence to the Secretary before a final decision had been reached. This course of action will not be followed, however, because the affidavits concern factual issues that need not be decided for the purposes of this action. Plaintiff's affidavit states that she never received any notice informing her:

 
1. that she was required to apply for retirement benefits,
 
2. that her SSI benefits would be terminated and that she could appeal ...

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