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WILSON v. SULLIVAN

March 31, 1989

JOHN WILSON and MARY CHRISTOPHER, on their own behalf and on behalf of others similarly situated, Plaintiffs,
v.
HON. LOUIS W. SULLIVAN, M.D.,* SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant



The opinion of the court was delivered by: BROTMAN

 This is a class action lawsuit against the Secretary of Health and Human Services ("the Secretary") challenging his severity regulation, step two of his five-step sequential evaluation procedure for determining whether a disability benefits claimant is disabled. The court granted injunctive relief in October 1985 on the ground that step two was facially invalid. The Secretary unsuccessfully appealed to the Third Circuit, but the Supreme Court granted his petition for a writ of certiorari and vacated and remanded the appeals court's decision for reconsideration in light of Bowen v. Yuckert, 482 U.S. 137, 107 S. Ct. 2287, 96 L. Ed. 2d 119 (1987). In Yuckert the Supreme Court upheld the severity regulation's facial validity. The court of appeals remanded the case to this court, and presently before the court are the Secretary's motions to vacate the preliminary injunction and for summary judgment and the plaintiffs' cross-motion for partial summary judgment.

 I. FACTS AND PROCEDURE

 Representative plaintiff John Wilson filed this action in October 1983 to appeal the Secretary's denial of his application for disability benefits pursuant to the Supplemental Security Income ("SSI") and Old Age Survivor and Disability Insurance ("OASDI") programs. Mary Christopher, whose application for disability insurance and SSI the Secretary also denied, joined Wilson in this action and together they sought leave of court to amend Wilson's complaint so they could seek class certification and injunctive relief. Plaintiffs claimed that they represented a class of disability applicants denied benefits by operation of step two of the Secretary's sequential evaluation process, 20 C.F.R. §§ 404.1520(c), 404.1521, 416.920(c), and 416.921 (1983). *fn1" As representatives of a class plaintiffs challenged the regulations as invalid and sought a preliminary injunction preventing the Secretary from applying step two in disability determinations for New Jersey claimants. After the plaintiffs filed their motions for class certification and injunctive relief but before the court decided them, the Third Circuit invalidated one of the challenged regulations, 20 C.F.R. § 404.1520(c) (1985), as inconsistent with the Social Security Act ("the Act"), 42 U.S.C. § 423(d)(1)(A) (1982 & Supp. III 1985). Baeder v. Heckler, 768 F.2d 547 (3d Cir. 1985).

 In October 1985 the court granted plaintiffs leave to file the amended complaint, and shortly thereafter the court granted the plaintiffs' motions for class certification and injunctive relief. Wilson v. Heckler, 622 F. Supp. 649 (D.N.J. 1985), vacated on other grounds, 796 F.2d 36 (3d Cir. 1986), vacated, 482 U.S. 923, 107 S. Ct. 3205, 96 L. Ed. 2d 692, remanded, 829 F.2d 33 (3d Cir. 1987). The court found that the plaintiffs satisfied the numerosity, commonality, typicality, and adequacy of representation requirements of Fed.R.Civ.P. 23(a) as well as the requirements of Fed.R.Civ.P. 23(b)(2) and certified a class consisting of persons in New Jersey who have filed or will file applications for disability benefits under titles II and/or XVI of the Social Security Act and whose claims will be affected by step two of the Secretary's sequential evaluation process as set forth in 20 C.F.R. §§ 404.1520(c), 404.1521, 416.920(c), and 416.921 (1983), and in the Secretary's then-current interpretation of those regulations, Social Security Ruling ("SSR") 82-55 (1982). 622 F. Supp. at 662-62. The court's ruling limited the class to those claimants who applied for benefits after July 25, 1984, id. at 662, but left open the possibility of enlarging the class. Id. at 657-58.

 Plaintiffs sought preliminary injunctive relief

 Id. at 654. Holding that the Secretary's interpretation of Baeder in a proffered new ruling, SSR 85-28, was "arbitrary and capricious for its patent disregard of Third Circuit precedent," id., and "represents a policy of constructive nonacquiescence," id. at 655, the court granted the requested relief. Id. In so holding, the court did not reach plaintiffs' claim that SSR 85-28 violated the notice and comment procedures of the Administrative Procedure Act ("APA"), 5 U.S.C. § 553(b) (1982). Id. at 654 n. 8.

 The Secretary appealed to the Third Circuit. The appeals court upheld this court's preliminary injunction, refused to consider the court's class certification decision on jurisdictional grounds, and vacated in part this court's order because it could be read to include claimants not part of the class. The Secretary sought a writ of certiorari from the Supreme Court. While the Secretary's petition for certiorari was pending, the Supreme Court held in Bowen v. Yuckert, 482 U.S. 137, 107 S. Ct. 2287, 96 L. Ed. 2d 119 (1987), that step two of the Secretary's sequential evaluation process does not contravene the Social Security Act. Yuckert directly undermined Baeder, on which this court premised its injunctive relief. The Supreme Court subsequently granted the Secretary's certiorari petition in this case and vacated the Third Circuit's decision, remanding the case for further consideration in light of Yuckert. Bowen v. Wilson, 482 U.S. 923, 107 S. Ct. 3205, 96 L. Ed. 2d 692 (1987). In turn, the Third Circuit remanded the case to this court. Wilson v. Bowen, 829 F.2d 33 (3d Cir. 1987).

 Both representative plaintiffs' individual claims have been adjudicated. The Social Security Administration's Appeals Counsel awarded benefits to Mary Christopher at some time after she and Wilson sought class certification but before the court passed on the motion. The court nonetheless found her to be a suitable class representative. Wilson, 622 F. Supp. at 650 n. 1. In addition, while the Secretary's petition for writ of certiorari was pending before the Supreme Court, this court granted plaintiff Wilson's motion for summary judgment in his individual case and ordered the Secretary to award benefits retroactive to May 26, 1982. The court's order stated that the decision shall in no way affect Wilson's status as a representative of the plaintiff class in this proceeding.

 This case is now before the court on the Secretary's motions to vacate the court's preliminary injunction and for summary judgment and on the plaintiffs' partial cross-motion for summary judgment. The Secretary argues (1) that Yuckert undermines the plaintiffs' claims; (2) that plaintiffs' challenge is now moot; (3) that plaintiffs' challenge is now unsuitable for class adjudication; and (4) that he is entitled to summary judgment on plaintiffs' APA claim. Plaintiffs argue in response (1) that they are likely to succeed on their claims that SSR 85-28 was promulgated in violation of the APA and that step two of the Secretary's sequential evaluation process is invalid as applied and therefore the court should not vacate its injunction; and (2) that they are entitled to summary judgment on the issues of the Secretary's alleged APA violation and alleged failure to abandon past misapplication practices.

 II. DISCUSSION

 A. Yuckert Undermines the Court's Preliminary Injunction

 This court's decision granting plaintiffs a preliminary injunction rested squarely on the Third Circuit's decision in Baeder v. Heckler, 768 F.2d 547 (3d Cir. 1985). See Wilson v. Heckler, 622 F. Supp. 649, 652-54 (D.N.J. 1985). The Baeder court held step two of the Secretary's sequential evaluation process invalid as contravening the Social Security Act by allowing the Secretary to consider only medical and not vocational factors. 768 F.2d at 553. This court granted injunctive relief because the Secretary refused to be bound by the Baeder holding. See Wilson, 622 F. Supp. at 655 ("The court finds that the new SSR [85-28] represents a policy of constructive nonacquiescence and agrees with plaintiffs that preliminary injunctive relief is strongly warranted."). In essence, the court ordered the Secretary to obey the law of the Third Circuit. However, Yuckert overturned Baeder. See Baeder v. Heckler, 826 F.2d 1345, 1346 (3d Cir. 1987) ("The Supreme Court made clear that our decision in Baeder was incorrect."). Because Baeder was the underpinning of this court's 1985 preliminary injunction, the injunction can no longer stand unless there is some independent basis for it.

 B. The Secretary's Motion to Dismiss

 The Secretary argues that the court should not reach plaintiffs' alternative arguments for continuing the preliminary injunction but instead should dismiss this action as moot or because it is unsuitable for class adjudication. The court disagrees.

 1. Mootness

 The Secretary claims that plaintiffs' claims are moot and therefore must be dismissed. A case becomes moot when there ceases to be a live case or controversy. Golden v. Zwickler, 394 U.S. 103, 108, 22 L. Ed. 2d 113, 89 S. Ct. 956 (1969); see U.S. Const. art. III, § 2. The Secretary argues that there is no longer a live controversy in this litigation because the named plaintiffs' claims have been adjudicated without reference to step two. The Secretary also explains that his challenged interpretation of the severity regulation, SSR 82-55 (1982), has been clarified by SSR 85-28 (1985) and superceded by SSR 86-8 (1986). The Secretary further argues that plaintiffs' challenge to his failure to consider combined non-severe impairments was mooted by the passage of section 4 of the Social Security Disability Benefits Reform Act of 1984, Pub. L. No. 98-460, 98 Stat. 1800 (codified at 42 U.S.C. § 423(d)(2)(C)).

 First, the class that the court certified in this action consists of "all persons in the State of New Jersey who have filed or will file applications for disability benefits . . . and whose benefits have been or will be denied or terminated based upon [step two]." Wilson v. Heckler, 622 F. Supp. 649, 661 (D.N.J. 1985) (emphasis added). There is no question that the representative plaintiffs' claims have been adjudicated without reference to step two. Their claims may be moot; *fn2" however, a class action can remain alive after the representative plaintiff's claims have been mooted. Sosna v. Iowa, 419 U.S. 393, 401, 42 L. Ed. 2d 532, 95 S. Ct. 553 (1975); Georgia Ass'n of Retarded Citizens v. McDaniel, 716 F.2d 1565, 1571 (11th Cir. 1983), vacated on other grounds, 468 U.S. 1213, 82 L. Ed. 2d 880, 104 S. Ct. 3582 (1984); Johnson v. Brelje, 701 F.2d 1201, 1204 n. 1 (7th Cir. 1983). In addition, the inclusion of future claimants in the class ensures that there will always be some class members presenting a live case or controversy. At any point in time the class will contain at least some members whose claims the Secretary has not yet adjudicated but will adjudicate with an ...


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