the Amended Returns were submitted after that deadline, a conclusive presumption arose that the Secretary's records of Smith's income, as reflected in the Original Returns, filed in 1983 and 1984, were correct. 42 U.S.C. § 405(c)(4)(C); 20 C.F.R. § 404.822.
Smith seeks an equitable remedy. "The Plaintiff begs ... that this court exercise its equitable powers and reverse the decision of the defendant...." Reply Brief at 3. "The issue is not whether the Plaintiff submitted the appropriate forms and payment within the time limit. She did not. She did not because she could not." Moving Brief at 4-5.
D. Equitable Remedies
Smith argues that "[a] District Court is vested with equity powers and, while it may not intrude upon the administrative process, it may adjust its relief to the demands of the case in accordance with the equitable principles governing judicial action." Reply Brief at 2.
The time limit on filing tax returns as evidence of self-employment income in 42 U.S.C. § 405(c)(4)(C) is a "'statute of limitation[s].'" Shore, 589 F.2d at 1237 n.11 (quoting Breeden, 493 F.2d at 1006).
"Federal statutes of limitations are generally subject to equitable tolling." Doherty v. Teamsters Pension Trust Fund, 16 F.3d 1386, 1393 (3d Cir. 1994) (citing Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95-96, 111 S. Ct. 453, 112 L. Ed. 2d 435 (1990); Holmberg v. Armbrecht, 327 U.S. 392, 397, 90 L. Ed. 743, 66 S. Ct. 582 (1946); Central States, S.E. & S.W. Areas Pension Fund v. Slotky, 956 F.2d 1369, 1376 (7th Cir. 1992)). The Supreme Court has specifically authorized equitable tolling of statutes of limitations in exigent circumstances in the Social Security context. Bowen v. City of New York, 476 U.S. 467, 480, 90 L. Ed. 2d 462, 106 S. Ct. 2022 (1986). Bowen was a class-action lawsuit against the Secretary, alleging that plaintiffs had been denied benefits under an illegal internal policy of the Secretary.
In Bowen, some members of the plaintiff-class had filed for judicial review more than sixty days after final decisions of the Secretary, notwithstanding the deadline set out in 42 U.S.C. § 405(g). The Bowen Court characterized the sixty-day deadline under 42 U.S.C. § 405(g) as a statute of limitations. 476 U.S. at 478 (citing Mathews v. Eldridge, 424 U.S. 319, 328 n.9, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976); Weinberger v. Salfi, 422 U.S. 749, 764, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975)). The Court concluded that "the equities in favor of tolling [the sixty-day limitation] are compelling," id. at 480, because "'the Government's secretive conduct prevented plaintiffs from knowing of a violation of [their] rights.'" Id. at 481 (quoting City of New York v. Heckler, 742 F.2d 729, 738 (2d Cir. 1984)).
The equitable concerns that motivated the Bowen Court to toll the sixty-day limitations period under 42 U.S.C. § 405(g) justify tolling the limitations period set out in 42 U.S.C. § 405(c)(4)(C). The failure of Smith to report her self-employment income was a consequence of circumstances beyond her control. While the Bowen Court considered the sixty-day requirement in § 405(g) as a statute of limitations, it observed that it was contained "in a statute that Congress designed to be 'unusually protective' of claimants. 476 U.S. at 467 (citation omitted). It further observed that Congress expressed a clear intention to allow tolling in some cases. Id. The Court noted that "the Secretary may grant an extension where a suit was not timely filed because of an illness, accident, destruction of records, or mistake." Id. at n.12. This reasoning is equally applicable in a § 405(c)(4)(C) situation, as presented by Smith.
The Amended Returns were not filed in a timely manner because of the inability of Smith to do so as a consequence of spousal abuse. This conduct prevented her from reviewing the Original Returns and justifies tolling of the limitation period until such time as she had a reasonable opportunity to learn of the facts and take corrective action. Tolling in this case best effects the purposes of the Act.
As discussed, the records of the self-employed are conclusively deemed correct because the self-employed usually are solely responsible for the reporting of their income. In this case, although self-employed, Smith lacked control over the completion and filing of the Original Returns. In these circumstances, it is inappropriate for the Secretary to presume conclusively that her records of income for Smith, based upon the Original Returns, are correct.
On the facts in this case, the equities favoring tolling are compelling. This matter is remanded and the Secretary is instructed to consider the facts surrounding Smith's circumstances, and the abuse she suffered, to determine the period appropriate for tolling the statute of limitations. If the Secretary determines, after tolling the statute, that the Amended Returns were timely filed, she is to then consider the Amended Returns in determining Smith's Quarters of Coverage and eligibility for disability benefits.
For the foregoing reasons, the decision of ALJ Fliegler is remanded for further proceedings consistent with this opinion. An order accompanies this opinion.
ALFRED J. LECHNER, JR., U.S.D.J.