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Abbington v. Berryhill

United States District Court, S.D. Alabama, Southern Division

December 13, 2018

NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.



         This action is before the Court on the Motion for Order of Remand (Doc. 18) filed by Plaintiff Betty A. Abbington. The Defendant Commissioner of Social Security (“the Commissioner”) has timely filed a response (Doc. 24) in opposition to the motion, Abbington has timely filed a reply (Doc. 25) to the response, and the motion is now under submission. (See Doc. 23). Upon consideration, the Court finds that Abbington's motion (Doc. 18) is due to be DENIED.[1]

         Abbington's present motion asserts that her case must be remanded to the Commissioner for a new hearing because the Administrative Law Judge (“ALJ”) who issued an unfavorable decision on her applications for Social Security benefits should be considered an “Officer of the United States” who was not properly appointed in accordance with the Appointments Clause of Article II, Section 2 of the United States constitution, based on the reasoning in the United States Supreme Court's recent decision in Lucia v. SEC, 138 S.Ct. 2044 (2018). In response, the Commissioner argues that Abbington forfeited this claim by failing to raise it at the administrative level. The Court agrees.[2]

         “[O]ne who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case is entitled to a decision on the merits of the question and whatever relief may be appropriate if a violation indeed occurred.” Ryder v. United States, 515 U.S. 177, 182-83 (1995) (emphasis added). Accord Lucia, 138 S.Ct. at 2055 (“This Court has held that ‘one who makes a timely challenge to the constitutional validity of the appointment of an officer who adjudicates his case' is entitled to relief.” (quoting Ryder, 515 U.S. at 182-83)). In Ryder, petitioner Ryder was an enlisted Coast Guard member challenging his conviction by court-martial. Ryder, 515 U.S. at 179. Ryder appealed his conviction to the Coast Guard Court of Military Review, raising an Appointments Clause challenge to the composition of that court for the first time on a request for rehearing. Id. After the Court of Military Review rejected his Appointments Clause challenge and largely affirmed his conviction, Ryder appealed to the United States Court of Military Appeals, which agreed that two of the three judges on the Court of Military Review panel had been appointed in violation of the Appointments Clause, but nevertheless affirmed Ryder's conviction on the ground that the actions of these judges were valid de facto. Id. at 179-80.[3]

         On certiorari review, the Supreme Court reversed the Court of Military Appeals, holding that the lower court had “erred in according de facto validity to the actions of the civilian judges of the Coast Guard Court of Military Review.” Ryder, 515 U.S. at 188. In finding that Ryder had timely raised his Appointment Clause challenge, thus “entitl[ing him] to a hearing before a properly appointed panel of” the Court of Military Review, the Court noted that Ryder “challenged the composition of the Coast Guard Court of Military Review while his case was pending before that court on direct review” and “raised his objection to the judges' titles before those very judges and prior to their action on his case.” Id. at 182.

         Lucia involved a situation more analogous to Social Security disability adjudications, in which an ALJ issues a decision that is then subject to appellate review by a higher administrative body prior to judicial review. In that case, the Court, citing Ryder's “timely challenge” holding, held that the petitioner had made such a timely challenge to the appointment of the Securities and Exchange Commission ALJ who heard his case when “[h]e contested the validity of [the ALJ]'s appointment before the Commission, and continued pressing that claim in the Court of Appeals and th[e Supreme] Court[, ]” Lucia, 138 S.Ct. at 2055, even though the petitioner had not raised the challenge to the ALJ himself. See Id. at 2050 (“On appeal to the SEC, Lucia argued that the administrative proceeding was invalid because [the ALJ] had not been constitutionally appointed.”).[4]

         The commonality between Ryder and Lucia is that both petitioners first raised their Appointments Clause challenges to the entities utilizing the deficiently appointed official or officials.[5] On the other hand, in Freytag v. Commissioner of Internal Revenue, 501 U.S. 868 (1991), the Court, at least implicitly, determined that the petitioners had waived their Appointments Clause challenge to special trial judges appointed by the United States Tax Court by “not only by failing to raise a timely objection to the assignment of their cases to a special trial judge, but also by consenting to the assignment[, ]” despite later raising the challenge in the circuit court of appeals. 501 U.S. at 872, 878.[6]

         Citing Lucia, the Ninth Circuit Court of Appeals has held, albeit in an unpublished decision, that petitioners forfeited an Appointments Clause challenge to an SEC hearing officer's decision “by failing to raise it in their briefs or before the agency.” Kabani & Co., Inc. v. U.S. Sec. & Exch. Comm'n, 733 Fed.Appx. 918, 919 (9th Cir. 2018) (emphasis added) (citing Lucia, 138 S.Ct. at 2055). In addressing Appointment Clause challenges to Social Security ALJs since Lucia was decided, numerous district courts have held that a claimant forfeits such a challenge by failing to raise it at the administrative level.[7]

         Here, Abbington concedes that her Appointment Clause challenge was not raised at any point during her administrative proceedings. Nevertheless, Abbington argues that, under the reasoning of Sims v. Apfel, 530 U.S. 103 (2000), the judicially-imposed rule that an Appointments Clause challenge must be “timely” raised does not apply to administrative proceedings in Social Security disability determinations.[8] In Sims, the majority opinion first explained general “issue exhaustion” principles as follows:

         The basis for a judicially imposed issue-exhaustion requirement is an analogy to the rule that appellate courts will not consider arguments not raised before trial courts. As the Court explained in Hormel v. Helvering, 312 U.S. 552, 61 S.Ct. 719, 85 L.Ed. 1037 (1941):

“Ordinarily an appellate court does not give consideration to issues not raised below. For our procedural scheme contemplates that parties shall come to issue in the trial forum vested with authority to determine questions of fact. This is essential in order that parties may have the opportunity to offer all the evidence they believe relevant to the issues which the trial tribunal is alone competent to decide; it is equally essential in order that litigants may not be surprised on appeal by final decision there of issues upon which they have had no opportunity to introduce evidence. And the basic reasons which support this general principle applicable to trial courts make it equally desirable that parties should have an opportunity to offer evidence on the general issues involved in the less formal proceedings before administrative agencies entrusted with the responsibility of fact finding.” Id., at 556, 61 S.Ct. 719.
As we further explained in [United States v. ]L.A. Tucker Truck Lines, [ 344 U.S. 33');">344 U.S. 33, 73 S.Ct. 67, 97 L.Ed. 54 (1952), ] courts require administrative issue exhaustion “as a general rule” because it is usually “appropriate under [an agency's] practice” for “contestants in an adversary proceeding” before it to develop fully all issues there. 344 U.S., at 36-37, 73 S.Ct. 67. (We also spoke favorably of issue exhaustion in Unemployment Compensation Comm'n of Alaska v. Aragon, 329 U.S. 143, 154-155, 67 S.Ct. 245, 91 L.Ed. 136 (1946), without relying on any statute or regulation, but in that case the waived issue had not been raised before the District Court, see id., at 149, 155, 67 S.Ct. 245.)
But, as Hormel and L.A. Tucker Truck Lines suggest, the desirability of a court imposing a requirement of issue exhaustion depends on the degree to which the analogy to normal adversarial litigation applies in a particular administrative proceeding. Cf. McKart v. United States, 395 U.S. 185, 193, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) (application of doctrine of exhaustion of administrative remedies “requires an understanding of its purposes and of the particular administrative scheme involved”)….Where the parties are expected to develop the issues in an adversarial administrative proceeding, it seems to us that the rationale for requiring issue exhaustion is at its greatest. Hormel, L.A. Tucker Truck Lines, and Aragon each involved an adversarial proceeding. See Hormel, supra, at 554, 556, 61 S.Ct. 719; L.A. Tucker Truck Lines, supra, at 36, 73 S.Ct. 67; Aragon v. Unemployment Compensation Comm'n of Alaska, 149 F.2d 447, 449-452 (C.A. 9 1945), aff'd. in part and rev'd in part, 329 U.S. 143, 67 S.Ct. 245, 91 L.Ed. 136 (1946). (In Hormel, we allowed an exception to the issue-exhaustion requirement. 312 U.S., at 560, 61 S.Ct. 719.) Where, by contrast, an administrative proceeding is not adversarial, we think the reasons for a court to require issue exhaustion are much weaker. More generally, we have observed that “it is well settled that there are wide differences between administrative agencies and courts, ” Shepard v. NLRB, 459 U.S. 344, 351, 103 S.Ct. 665, 74 L.Ed.2d 523 (1983), and we have thus warned against reflexively “assimilat[ing] the relation of ... administrative bodies and the courts to the relationship between lower and upper courts, ” FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 144, 60 S.Ct. 437, 84 L.Ed. 656 (1940).

Sims, 530 U.S. at 108-10. After considering these principles, a four-justice plurality of the Court then stated:

The differences between courts and agencies are nowhere more pronounced than in Social Security proceedings. Although “[m]any agency systems of adjudication are based to a significant extent on the judicial model of decisionmaking, ” 2 K. Davis & R. Pierce, Administrative Law Treatise § 9.10, p. 103 (3d ed.1994), the SSA is “[p]erhaps the best example of an agency” that is not, B. Schwartz, Administrative Law 469-470 (4th ed. 1994). See id., at 470 (“The most important of [the SSA's modifications of the judicial model] is the replacement of normal adversary procedure by ... the ‘investigatory model' ” (quoting Friendly, Some Kind of Hearing, 123 U. Pa. L. Rev. 1267, 1290 (1975))). Social Security proceedings are inquisitorial rather than adversarial. It is the ALJ's duty to investigate the facts and develop the arguments both for and against granting benefits, see Richardson v. Perales,402 U.S. 389, 400- 401, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971), and the Council's review is similarly broad. The Commissioner has no representative before the ALJ to oppose the claim for ...

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