MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, APPLICANT v. MARIO LOPEZ, ET AL. No. A-707 In The Supreme Court Of The United States October Term, 1983 Application For A Stay Pending Petition For A Writ Of Certiorari To The United States Court of Appeals For The Ninth Circuit Application For A Stay Pending Petition For A Writ of Certiorari To The United States Court of Appeals For The Ninth Circuit Pursuant to Rules 43 and 44 of the Rules of this Court and 28 U.S.C. 2101(f), the Solicitor General, on behalf of the Secretary of Health and Human Services, respectfully applies for a stay of the judgment of the United States Court of Appeals for the Ninth Circuit pending the filing and disposition of a petition for a writ of certiorari in this case. On September 9, 1983, Justice Rehnquist granted the Secretary's application for a stay of Paragraph 4(c) of the district court's order "pending determination of the Secretary's appeal by the court of appeals for the Ninth Circuit" (Heckler v. Lopez, No. A-145 (Rehnquist, Circuit Justice), slip op. 10), and on October 11, the full Court denied respondents' motion to vacate that stay. On February 22, 1984, the court of appeals rendered its decision. Justice Rehnquist had granted a stay because the district court awarded relief to "numerous individuals who have never received 'final decisions' from the Secretary on their claims within the meaning of 42 U.S.C. Section 405(g)" and because he had "serious doubt" regarding the district court's authority to award interim benefits to class members who had been found not to be disabled (slip op. 7). The court of appeals, however, rejected the Secretary's contentions on these very points (App. A, infra, 17-43). On the merits, the court of appeals modified the district court's injunction to exclude certain class members from coverage (App. A, infra, 15-17), but it otherwise affirmed the preliminary injunction "in all respects" (id. at 43). It would seem fair to assume from the Court's refusal to vacate the stay that a majority of the Court shared Justice Rehnquist's serious reservations regarding the propriety of the district court's actions. The court of appeals' February 22 opinion does nothing to dispel those doubts. To the contrary, the strained nature of that court's efforts, even after full deliberation, to suggest possible theories of jurisdiction and for the payment of benefits that Congress has not authorized only serves to confirm that the lower courts' wholesale intrusion into the Secretary's on-going administration of the disability programs is completely inconsistent with the statutory scheme Congress has prescribed for the orderly administrative and judicial review of claims for Social Security benefits. We therefore request a stay of the judgment of the court of appeals pending the filing and disposition of a petition for a writ of certiorari. /1/ STATEMENT 1. This suit was filed in the United States District Court for the Central District of California on February 4, 1983 by 20 named individual plaintiffs and 14 organizational plaintiffs. They contended that under the Ninth Circuit's decisions in Finnegan v. Mathews, 641 F.2d 1340 (1981), and Patti v. Schweiker, 669 F.2d 582 (1982), the Secretary could not terminate disability benefits under Title II and Title XVI of the Social Security Act unless there was evidence that the claimant's medical condition had improved since he was first found to be disabled. The plaintiffs sought to compel the Secretary to apply a "medical improvement" standard in her on-going administrative review of individuals receiving disability benefits and to reopen closed cases and review them under that standard. The district court certified a class consisting of all persons who reside in the Ninth Circuit and who (a) received disability benefits under Title II or Title XVI of the Act and have been or will be considered for termination after August 30, 1981, or (b) received disability benefits under the 'grandfather clause' of Title XVI and have been or will be considered for termination after August 25, 1980 (App. C, infra, Paragraph 3). The two dates are one year prior to the dates on which the district court determined that the decisions in Patti and Finnegan, respectively, became final (App. D, infra, 12 n.9). With respect to this certified class, the district court enjoined the Secretary from failing to follow Finnegan and Patti and from implementing rulings that explained that the reasoning of those decisions would not be applied to cases arising under intervening Social Security Administration (SSA) regulations. App. C, infra, Paragraphs 4(a) and (b). In Paragraph 4(c) of its order, the court instructed the Secretary to notify each class member whose benefits were terminated that he "may apply for reinstatement of benefits if he or she believes that his or her medical condition has not improved following the granting of disability benefits." More than 34,000 notices were sent to class members on August 15, 1983, after the court of appeals denied the Secretary's application for an emergency stay (App. G, infra, Paragraph 5). SSA received approximately 5,000 requests for reopening and reinstatement of benefits in response to the notice (App. G, infra, Paragraph 9). After the full Court denied respondents' motion to vacate Justice Rehnquist's stay, SSA sent a second notice informing class members that further processing of requests for reinstatement and review had been suspended. 2. a. On February 22, 1984, the court of appeals affirmed the district court's preliminary injunction, rejecting the Secretary's contentions that the district court lacked jurisdiction over the claims of class members who did not receive a "final decision" from the Secretary and did not have authority to award interim benefits. The court recognized that "Justice Rehnquist considered many of the same issues upon granting the Secretary's stay request," but it declined to "assume from the Court's action (refusing to vacate the stay) that all the Justices in the majority agreed with Justice Rehnquist's application of the relevant law" (App. A, infra, 46-47 n.6). Thus, on almost every point, the court of appeals' analysis is directly contrary to that of Justice Rehnquist and, in several respects, to that of Justice Stevens as well. First, although Justice Rehnquist and Justice Stevens concluded that respondents' characterization of their claim as "constitutional" in nature should be disregarded (slip op. 8 (Rehnquist, Circuit Justice); slip op. 6 (Stevens, J., dissenting), the court of appeals concluded that respondents' claims "may properly be treated as constitutional for purposes of the inquiry before us" (App. A, infra, 47 n.10). Second, although Justice Rehnquist had explained that this Court had held in Weinberger v. Salfi, 422 U.S. 749, 766 (1975), that a court may not excuse exhaustion of administrative remedies because of its own view that exhaustion would be futile (slip op. 8), the court of appeals excused the entire class from exhaustion (even though it conceded that many class members might have their benefits reinstated administratively) because it believed exhaustion with regard to the medical improvement issue would be futile (App. A, infra, 18-21). Third, although Justice Rehnquist believed that the "collateral" pretermination hearing issue involved in Mathews v. Eldridge, 424 U.S. 319 (1976), was substantially different from respondents' contention that the Secretary had made an inadequate evidentiary showing, since respondents' contentions "could benefit from further factual development and refinement through the administrative process" (slip op. 8-9), the court of appeals concluded that the medical improvement issue is "collateral" to the merits of their claims for benefits within the meaning of Mathews v. Eldridge and that exhaustion could be excused on that ground (id. at 21-23). In addition, although Justice Stevens agreed with Justice Rehnquist that the district court had no jurisdiction over the claims of class members who received decisions terminating their benefits more than 60 days before this suit was filed (Heckler v. Lopez (Stevens, J., dissenting), slip op. 3), the panel majority disregarded these conclusions and held that respondents were likely to succeed on their contentions that the district court had jurisdiction over those claims (App. A, infra, 26-34). /2/ The court also concluded that if consideration of those claims under 42 U.S.C. 405(g) is barred by the 60-day time limit in that Section, the district court nevertheless could require the Secretary to reopen those claims through the exercise of mandamus jurisdiction under 28 U.S.C. 1361 (App. A, infra, 34-37). Finally, although Justice Rehnquist had expressed "serious doubt," which he believed would be shared by other Members of the Court, whether the district court's order requiring the payment of interim benefits was consistent with 42 U.S.C. 405(i) and this Court's decision in Schweiker v. Hansen, 450 U.S. 785 (1981) (slip op. 6-7, 9), the court of appeals found this very argument to be "without merit" (App. A, infra, 37). In the court's view, the ordering of interim benefits was simply an exercise of the district court's "traditional equitable power" and "equitable discretion" (id. at 39) that was not barred by sovereign immunity (id. at 41-42). b. The court of appeals did modify the preliminary injunction on the merits to eliminate relief for class members who received a final decision termination their benefits before the Ninth Circuit's decisions in Finnegan and Patti became final, because such claimants obviously could not argue that the Secretary was required by the Constitution to apply the reasoning of Finnegan and Patti in their cases (App. A, infra, 15-17). However, the court otherwise affirmed the preliminary injunction "in all respects" (id. at 43). SSA estimates that there are 15,485 individuals who fall within the modified scope of Paragraph 4(c) of the district court's preliminary injunction (App. G, infra, Paragraph 6). SSA further estimates that the monthly cost of paying interim benefits to these individuals would be $9,194,325 if all requested reinstatement of benefits and that the administrative cost of readjudicating their cases would be $5.6 million, although the actual costs may prove to be less (id. Paragraphs 7, 8 and 9). c. The court of appeals also issued an order on February 22, 1984 stating that no petition for rehearing would be entertained and shortening the time for issuance of its mandate to 10 days, rather than the 21 days ordinarily allowed by Fed. R. App. P. 41(a) (App. B, infra). The court did provide, however, that if an application for a stay is filed with this Court within this period, the mandate would not issue until the Court or a Circuit Justice acted (ibid.). /3/ ARGUMENT The Solicitor General has determined that a petition for a writ of certiorari will be filed to review the judgment of the court of appeals in this case. We therefore respectfully apply for a stay of the judgment of the court of appeals pending the filing and disposition of the petition for a writ of certiorari. This will maintain the stay of Paragraph 4(c) of the district court's preliminary injunction that was granted by Justice Rehnquist on September 9, 1983. The Secretary's prior application to this Court was granted when the case was still pending in the court of appeals, even though such a stay was thought to require a showing stronger than that necessary for a stay pending the disposition of a petition for a writ of certiorari by this Court. Heckler v. Lopez, No. A-145 (Sept. 9, 1983) (Rehnquist, Circuit Justice), slip op. 3; id. (Oct. 11, 1983) (Brennan, J., dissenting), slip op. 2. It follows a fortiori that, now that the case is ripe for the filing of a petition for certiorari, the Court should grant the instant application. Moreover, the jurisdictional, exhaustion, and interim benefits issues in this case are closely related to those involved in Heckler v. Ringer, No. 82-1771 (argued Feb. 27, 1984), and Heckler v. Day, No. 82-1371 (argued Dec. 5, 1983). Since a stay already has been in effect in this case for six months, it is especially prudent for the Court to continue that stay rather than to require the Secretary at this time to devote her scarce resources to the readjudication of closed casea and to reinstate the payment of interim benefits that might be terminated almost immediately. See Heckler v. Blankenship, No. A-589 (O'Connor, Circuit Justice), slip op. 2-3. In deciding whether to grant a stay pending certiorari, the Court or Circuit Justice ordinarily regards it as appropriate "to determine whether four Justices would vote to grant certiorari, to balance the so-called 'stay equities', and to give some consideration as to predicting the final outcome of the case in this Court." Heckler v. Lopez (Rehnquist, Circuit Justice), slip op. 3. See also id. (Brennan, J., dissenting), slip op. 2; Heckler v. Blankenship, No. A-689 (O'Connor, Circuit Justice), slip op. 2. In this case those factors clearly weigh in favor of a stay, as the Court's prior action demonstrates. 1. There is A Strong Likelihood That Four Justices Would Vote to Grant Certiorari By granting the Secretary's petitions for writs of certiorari in Heckler v. Ringer and Heckler v. Day, the Court has already determined that the questions of jurisdiction and exhaustion of administrative remedies under the Social Security Act and the authority of a court to order the payment of interim benefits warrant review. See Heckler v. Blankenship (O'Connor, Circuit Justice), slip op. 2. Certiorari is warranted here because the court of appeals' decision on these questions is flatly inconsistent with this Court's decisions in Weinberger v. Salfi, Mathews v. Eldridge, Califano v. Sanders, 430 U.S. 99 (1977), and Schweiker v. Hansen, 450 U.S. 785 (1981). /4/ In addition, the type of massive and preemptory judicial intrusion into the Secretary's on-going administration of the Social Security Act countenanced by the court of appeals in this case threatens to throw the orderly adjudication of claims for Social Security benefits into chaos. There are numerous other class actions in which the courts likewise have wholly disregarded this Court's clear holdings and intervened in the on-going adjudication of thousands of claims still pending administratively or ordered the reopening of closed cases. /5/ Such suits may be expected to proliferate further unless this Court once again reaffirms its holding in Salfi that the courts must strictly adhere to the limitations on judicial review under the Social Security Act. When the courts intervene in this manner into the administrative adjudication of thousands of claims, the disruption can be enormous. Here, for example, we have been informed by HHS that the administrative adjudication of disability cessation cases throughout the Ninth Circuit was halted between June 1983 and January 1984 because of this case, except in those instances in which it was clear that the claimant was entitled to benefits. And if the Secretary must divert scarce resources to reopen and review claims that the claimants themselves had abandoned, the result will be a further disruption and postponement of the adjudication of the claims of those individuals who, in contrast to thousands of the respondents in this case, have conscientiously pursued their administrative remedies. Cf. Heckler v. Day, supra. Such class actions involving thousands of unexhausted claims for benefits also impose a wholly unwarranted additional burden on the courts, because HHS informs us that there are now more than 40,000 Social Security cases pending in district courts filed by claimants who have exhausted their administrative remedies -- an increase from the approximately 24,000 such cases pending in September 1982. These issues plainly deserve this Court's attention, and indeed this Court's decision in Heckler v. Ringer may dispose of the jurisdictional and exhaustion issues in this case as well. 2. There Is A Very Strong Likelihood That The Secretary Will Succeed On The Merits a. The Medical Improvement Issue And The Court of Appeals' Characterization Of The Issues As Constitutional In Nature Although the merits of the medical improvement question are not directly involved in this stay request -- which is based on the jurisdictional and interim benefits issues -- we will discuss that question briefly in order to respond to the court of appeals' wholly unwarranted suggestions of bad faith by the Secretary; to answer its characterization of this case as being of constitutional dimension; and to demonstrate that both courts below reached out to decide an issue over which they clearly had no jurisdiction. (i) The administration of the nationwide Social Security disability programs involving several million beneficiaries presents the Secretary with perhaps the most extraordinary and complex task that has confronted any agency of government in recent times. Congress repeatedly has recognized as much. See, e.g., Gov't Br. 19-31, Heckler v. Day. Yet it was Congress that in June 1980 superimposed on the disability programs the requirement that the Secretary review at least once every three years the disability status of every person receiving Title II disability benefits except those who previously were found to be permanently disabled. See 42 U.S.C. (Supp. V) 421(h). The Secretary has sought conscientiously to implement that mandate. The ultimate question involved in a continuing disability review, of course, is whether the claimant's status currently satisfies the statutory definition of "disability." See 42 U.S.C. 423(d)(1)(A) and (d)(2), 1382c(3). Respondents contend that the mere fact that the claimant was once found to be disabled at an earlier date gives rise to a presumption that he is currently disabled at the time that his case is reviewed, thereby automatically placing the burden on the Secretary to prove otherwise by showing that the claimant's medical condition has improved. The Ninth Circuit applied this reasoning in Patti v. Schweiker, 669 F.2d at 586-587. This Court made clear in Mathews v. Eldridge, however, that a claimant whose status is reviewed bears the burden both of proof and production of evidence regarding his eligibility. There, the Court stated that "(i)n order to establish initial or continued entitlement to disability benefits a worker must demonstrate" that he is unable to engage in substantial gainful activity, and that "(t)o satisfy this test the worker bears a continuing burden of showing, by means of 'medically accepted clinical and laboratory diagnostic techniques,' Section 423(d)(3), that he has a physical or mental impairment" of the requisite severity. 424 U.S. at 336. The Secretary promulgated regulations in August 1980 to make clear that benefits will be terminated in the claimant has not carried this burden of showing on the basis of current evidence that he is disabled, and that it is not necessary for the medical evidence specifically to establish that the claimant's medical condition has improved since the prior finding of disability. 45 Fed. Reg. 55568 (1980); 20 C.F.R. 404.1586, 404.1594 and 416.994; /6/ App. C. infra, Exh. C. These regulations were promulgated pursuant to the Secretary's broad authority under 42 U.S.C. 405(a) "to regulate and provide for the nature and extent of the proofs and evidence and the method of taking and furnishing the same in order to establish the right to benefits * * * ." As this Court recently observed, regulations promulgated pursuant to 42 U.S.C. 405(a) must be sustained unless they exceed the Secretary's statutory authority or are arbitrary and capricious. See Heckler v. Campbell, No. 81-1983 (May 16, 1983), slip op. 7-8. The Secretary's 1980 regulations clearly are not invalid on either ground. Rules concerning presumptions and the production of evidence concern the "nature and extent of proofs and evidence and the method of taking and furnishing the same," and they therefore do not exceed the Secretary's statutory authority under 42 U.S.C. 405(a). And it is scarcely arbitrary and capricious for the Secretary not to include in her regulations a presumption that the claimant is currently disabled based on nothing more than the fact that the claimant was found to be disabled at some time in the past. The fact that Congress has directed the Secretary to review the status of such claimants itself establishes that Congress did not intend to give controlling force to the prior finding. There also would be a substantial systemic flaw in shifting the burden in the manner suggested. The Secretary, through SSA and the state agencies, acts "as an adjudicator and not as an advocate or adversary." Richardson v. Perales, 402 U.S. 389, 403 (1971). See also Heckler v. Campbell, slip op. 10-11 & n.12. To shift to the Secretary the burden of rebutting and defeating the individual's claim of continuing entitlement would transform her role to that of an adversary. Moreover, because Congress exempted from mandatory periodic review those individuals who previously were found to be permanently disabled (42 U.S.C. (Supp. V) 421(h)), the medical improvement issue respondents raise in this suit relates principally to that category of individuals whose medical condition was thought to be subject to change. Because the claimant has access to the evidence on that question, the burden properly rests on him to produce it. Practical considerations also weigh against the result respondents seek on the merits. In many cases, the record of the prior determination of disability might not be available; or the basis for the prior finding (including what evidence was credited) might not be clear. In addition, diagnostic or technological advances might undermine the prior finding, and intervening legal or programmatic developments -- such as the promulgation of the medical-vocational guidelines sustained by the Court in Heckler v. Campbell -- might require that the claimant's condition be measured against new standards or by new methods. In many cases as well, the prior finding of disability will have been made by a state agency at a time (such as during the late 1970's) when, because of limited resources and a rapidly expanding caseload, there was only limited review by SSA of state agency determinations to assure nationwide uniformity and consistency with statutory and regulatory policies. See Gov't Br. 4-5, Heckler v. Day. Errors that occurred under those circumstances should not be perpetuated at the time of a fresh review of the case. This is not to say that the prior finding of disability is irrelevant. In many cases, that finding and the evidence on which it is based, if of appropriate quality, might well shed light on the claimant's current status. But because the weight that should be attached to these factors in particular cases will vary, the Secretary reasonably could decide not to adopt a uniform presumption of current disability based on nothing more than the bare fact that the claimant was found to be disabled once before. Furthermore, notwithstanding the court of appeal's views on the instant appeal (App. A, infra, 20), application of the Secretary's 1980 regulations would not appear to be inconsistent with the Ninth Circuit's prior decision in Patti. The reasoning of the court in Patti is unclear, but its decision seems to have rested on nothing more than general evidentiary notions that the court believed were appropriate in resolving the particular case before it. 669 F.2d at 586-587. The court did not state that the presumptions and evidentiary burdens it applied were compelled by the Social Security Act itself, and the court did not address the Secretary's current regulations, which did not even apply to the case before it. Accordingly, after Patti was decided, the Secretary concluded that the decision in Patti should not control in cases governed by those regulations (App. C, infra, Exh. B). This was an entirely reasonable response to the decision in Patti. Thus, there is simply no basis for the court of appeals' accusation that the Secretary has proceeded in bad faith in adhering to her nationwide approach to the problem. /7/ (ii) There also is no basis for the court of appeals' repeated observation (App. A, infra, 4, 20, 21-22, 29-31, 45-49 nn.10, 11) -- which seems to have colored that court's entire view of the case -- that respondents have raised a serious constitutional question in their challenge to the Secretary's application of the standards in her regulations, rather than the "medical improvement" reasoning of Patti and Finnegan, to cases on administrative review in the Ninth Circuit. As the court of appeals itself recognized (App. A, infra, 47 n.10), Justice Rehnquist regarded respondents' challenge to be a nonconstitutional attack on the Secretary's assertedly "insufficient evidentiary showing," even though "respondents put the label 'constitutional' on their claim" (Heckler v. Lopez (Rehnquist, Circuit Justice) slip op. 8-9), and Justice Stevens in his dissent specifically "agree(d) with JUSTICE REHNQUIST that respondents' contention that their claim is a 'constitutional' one should be disregarded" (Heckler v. Lopez (Stevens, J., dissenting), slip op. 6). This view is clearly correct. Respondents's submission that the Secretary is required by the decisions in Patti and Finnegan to apply a medical improvement standard in all cases at the administrative level in the Ninth Circuit is nothing more than an assertion against the government of the doctrine of nonmutual collateral estoppel. This Court unanimously rejected such an assertion in United States v. Mendoza, No. 82-849 (Jan. 10, 1984). There, the Court held that although the government is bound to a prior judgment under the principles of res judicata, it "is not further bound in a case involving a litigant who was not party to the earlier litigation." Slip op. 9. Accordingly, although the court of appeals and district courts in the Ninth Circuit may choose to give the prior decisions in Patti and Finnegan stare decisis effect in future cases, the Secretary would not be bound by those decisions in cases involving other claimants even under the doctrine of collateral estoppel. A fortiori, the court of appeals' far more extreme view that the Secretary is constitutionally compelled to apply the reasoning of Patti and Finnegan in cases involving other claimants -- even in her day-to-day administration of the Act in matters not within the jurisdiction of the courts -- is wholly without merit. /8/ In exercising its power to "ordain and establish" such inferior courts as it deems appropriate (Art. III, Section 1), Congress surely is not required to provide that their judgments be given binding effect beyond the particular case or controversy that is adjudicated. And Congress has not done so. As this Court observed in another case in which the court of appeals had previously rendered a decision on the issue presented: Acts of Congress are generally to be applied uniformly throughout the country from the date of their effectiveness onward. Generally the United States, like other litigants, is entitled to adhere to what it believes to be the correct interpretation of a statute, and to recoup the benefits of that adherence if it proves to be correct, except where bound to the contrary by a final judgment in a particular case. United States v. Estate of Donnelly, 397 U.S. 286, 294-295 (1970). /9/ Congress has not suggested that a different rule should apply under the Social Security Act. /10/ Quite aside from the absence of a constitutional or statutory basis for the rule the court of appeals suggests, that rule would be quite unsound as a matter of policy. It would freeze the court of appeals' first holding on an issue (see United States v. Mendoza, slip op. 8) and prevent a litigant from ever requesting the court to reconsider the matter in a subsequent case, even in light of changed circumstances or legal developments elsewhere. Those considerations are relevant here, because the Second and Third Circuits have expressly rejected the Ninth Circuit's approach to the question of medical improvement (see Wheeler v. Heckler, 719 F.2d 595, 601 (2d Cir. 1983); Kuzmin v. Schweiker, 714 F.2d 1233, 1237 (3d Cir. 1983)), and the Solicitor General and the Secretary are now considering whether to ask this Court to review the medical improvement issue. In these fluid circumstances, weighty considerations of uniformity, efficiency, and fairness support the Secretary's adherence to the evidentiary principles reflected in her nationwide regulations. Respondents of course are free to challenge the Secretary's rulings on these and other matters on judicial review in their individual cases under 42 U.S.C. 405(g) fter they receive a "final decision" on their claims for benefits -- assuming that the Secretary ultimately rejects their claims for benefits and that evidence of medical improvement, or the absence thereof, has any bearing on that decision. It is clear, however, that respondents' challenge on these evidentiary points at that time would not be constitutional in nature. /11/ b. Exhaustion of Administrative Remedies (i) The court of appeals held that the district court had jurisdiction over the claims of those persons whose cases were still pending on administrative review when this case was filed but who had not yet received the "final decision" of the Secretary -- i.e. a decision of the Appeals Council -- on their claims for benefits (App. A., infra, 18-23). The court reasoned that exhaustion of administrative remedies would be "futile" with respect to whether the Secretary must find medical improvement and apply the reasoning of Patti and Finnegan in cases on administrative review. This holding is flatly inconsistent with Weinberger v. Salfi. The district court in Salfi also excused exhaustion of administrative remedies on the ground that exhaustion would be "futile" (J.S. App. 4a, No. 74-214 (1974 Term)), but this Court explicitly rejected that approach, holding that a "final decision" of the Secretary is "central to the requisite grant of subject matter jurisdiction" in 42 U.S.C. 405(g). 422 U.S. at 764. The Court stressed that although the Secretary may determine that full exhaustion of internal review procedures is not necessary in order "serve (her) own interests in effective and efficient administration" and that she therefore may deem an otherwise interlocutory decision denying a claim for benefits to be "final" for purposes of judicial review, exhaustion "may not be dispensed with merely by a judicial conclusion of futility such as that made by the District Court here." 422 U.S. at 766. The Court reiterated the holding and reasoning of Salfi in Mathews v. Eldridge (424 U.S. at 328, 330) and Mathews v. Diaz (426 U.S. at 75-77). Moreover, at the time Congress enacted the disability program in 1954 and 1956 and the SSI program in 1972, the regulations in effect under 42 U.S.C. 405 long had made clear that judicial review is not available under Section 405(g) until after the Appeals Council had rendered its decision. See Gov't Reply Br. 5-7, Heckler v. Ringer. Congress's explicit provision in 421(d) and 1383(c) that judicial review would be available on claims for disability benefits as "provided in Section 405(g)" must be viewed as a ratification of that requirement. Thus, in order to affirm the court of appeals' holding here, the Court would have to overrule its decisions in Salfi and subsequent cases and disregard the procedures that have governed administrative and judicial review of Social Security claims since 1940. It also is significant that the Court announced its holding in Salfi in a case in which the plaintiffs challenged the constitutionality of a provision of the Social Security Act, a matter that was beyond the competence of the Secretary to decide. A fortiori that holding must apply in this case, which involves questions arising under the Act that are committed to the Secretary in the first instance -- matters relating to presumptions of disability, the burden of production of evidence, and the weight to be given the presence or absence of specific evidence of medical improvement. Furthermore, in Salfi, the Court stressed that it was permissible for the Secretary to dispense with full exhaustion only because the claimant and the Secretary agreed that no facts were in dispute and that the Secretary's interpretation of the governing statutory provision was correct, thereby resolving all issues bearing on the claim for benefits except the constitutionality of the statutory provision that barred payment. See 422 U.S. at 765, 767. /12/ Because the Secretary cannot resolve that constitutional issue, she properly could conclude that further administrative review of the claim was unnecessary. This case is completely different, and the Secretary accordingly has not determined that further administrative review is unnecessary. There obviously is no particularized agreement between the Secretary and each of the thousands of members of the respondent class regarding the facts of their individual cases or the legal significance of those facts. To the contrary, it is the purpose of the administrative proceedings that respondents seek to avoid for the Secretary to make findings to resolve such factual disputes and to render decisions applying the relevant statutory provisions in light of those factual findings. Nor do respondents agree with the Secretary regarding the interpretation of the relevant provisions of the Social Security Act, as in Salfi. Finally, there simply is no basis for concluding that it would be futile for respondents to exhaust their administrative remedies on their claims for benefits -- even assuming, contrary to Salfi, that a court could dispense with exhaustion on that ground. The state agency, the ALJ, or the Appeals Council might well find a claimant disabled on the basis of current evidence and under current standards even without specifically determining whether his medical condition had improved. Indeed, as Justice Rehnquist noted (slip op. 8) and as we pointed out in our original stay application (at 14), 13 of the 20 named plaintiffs in this case did prevail in administrative proceedings on their claims for benefits, thereby obviating any need for judicial review of their claims. On the other hand, administrative proceedings might show that the individual claimants' condition had improved and that benefits should be denied even under the approach respondents urge. The "final decision" requirement in 42 U.S.C. 405(g) is intended to serve precisely this purpose of reducing the number of cases that the courts must review. (ii) The court of appeals believed however, that respondents should be able to obtain immediate judicial review under 42 U.S.C. 405(g) on certain "questions" or "issues" even though they might prevail on their claims for benefits at the administrative level (App. A infra, 18-21). This conclusion is wholly without merit as well. Section 405(g) provides for judicial review only of the Secretary's "final decision" with respect to "the rights of any individual applying for a payment" (42 U.S.C. 405(b) and 1383(c)(1)) -- i.e., of the Secretary's final judgment on the overall claim for benefits. That final judgment necessarily will subsume the Secretary's disposition of any subsidiary issues that ultimately turn out to have a bearing on the proper disposition of the claim. Section 405(g) does not authorize a claimant to separate out and seek interlocutory judicial review of particular questions prior to the Secretary's "final decision" disposing of all issues bearing on the claim and terminating the litigation at the administrative level. Such interlocutory and piecemeal review would substantially undermine the orderly administrative and judicial disposition of Social Security claims. Compare Flanagan v. United States, No. 82-374 (Feb. 21, 1984), slip op. 4-5; Cobbledick v. United States, 309 U.S. 323, 325 (1940). Indeed, it is significant that Congress utilized the identical phrase "final decision" in 42 U.S.C. 405(g) and 28 U.S.C. 1291, because this Court long has construed the latter provision to embody a congressional policy that is "inimical to piecemeal appellate review of trial court decisions which do not terminate the litigation." United States v. Hollywood Motor Car Co., 458 U.S. 263, 265 (1982). When Congress has intended to depart from this policy and to permit review prior to final judgment, it has expressly so provided. Thus, Congress has enacted a statutory exception in 28 U.S.C. 1292(b) permitting interlocutory appellate review on a controlling question of law under carefully limited circumstances. Congress likewise has demonstrated that when it wants to provide for a parallel exception to the idential "final decision" requirement in the Social Security Act, it has expressly so provided. Under 42 U.S.C. 1395oo(f)(1), Congress has permitted a provider of services under the Medicare title of the Act to obtain interlocutory judicial review of a "question of law or regulations" prior to the "final decision" on its overall reimbursement claim. See Gov't Reply Br. 4-5, Heckler v. Ringer. The fact that Congress did not furnish a comparable right of interlocutory judicial review to Social Security beneficiaries under 42 U.S.C. 405(g) reinforces the conclusion that Congress "deliberately foreclosed" such a right. United States v. Erika, Inc., 456 U.S. 201, 208 (1982). (iii) To be sure, this Court has construed the "final decision" requirement in 42 U.S.C. 405(g) and 28 U.S.C. 1291 to permit immediate judicial review of what the Court has termed "collateral" issues. In order to fall within the "small class" of such cases under 28 U.S.C. 1291, the order involved "must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978). In recognizing a parallel exception under 42 U.S.C. 405(g) in Mathews v. Eldridge, the Court relied upon the collateral order exception under 28 U.S.C. 1291 (424 U.S. at 331 n.11) and stressed that the issue in Eldridge was entirely separate from the merits of the claim for benefits, was effectively unreviewable in subsequent proceedings after termination of benefits, and would not be answered by an award or denial of benefits on other grounds. 424 U.S. at 330-332. /13/ Respondents' evidentiary contentions regarding medical improvement and their assertion of nonmutual collateral estoppel against the government on the basis of Patti and Finnegan are not even remotely "collateral" issues under this test. Those contentions are integrally related to the merits of their claims for disability benefits and will be fully reviewable by a court under 42 U.S.C. 405(g) after the Secretary renders her final judgment on the overall claim. Awaiting the final judgment is especially sound here, because a court then would be able to consider respondents' contentions in a concrete factual setting and take into account whatever weight the Secretary actually gave to the presence or absence of evidence of medical improvement in the particular case. If the court then concludes that the Secretary's decision is not supported by substantial evidence or otherwise must be modified or reversed in the absence of evidence of medical improvement, the matter then may be reviewed under whatever the court determines to be the appropriate analysis. And if the claimant prevails on his claim for benefits under this or some other theory, he may be awarded retroactive benefits. In enacting the special procedure for the review of disability claims in 42 U.S.C. 405, Congress deemed such an award of retroactive benefits to be an adequate statutory remedy for an erroneous termination of benefits under the statute, just as it is an adequate remedy for an erroneous initial denial of a new application for benefits. A court has no authority to disregard this congressional judgment and to permit a circumvention of the statutory procedures on the basis of its own weighing of a claimant's interest in immediate judicial review. /14/ c. The 60-Day Limitation In addition to excusing exhaustion of administrative remedies as a precondition to judicial review for those class members whose claims were pending on administrative review, the court of appeals affirmed the district court's preliminary injunction requiring the Secretary to reopen claims that the claimants themselves had abandoned and allowed to become final by failing to seek the next level of administrative review or judicial review within the 60 days that is uniformly allowed by statute and applicable regulations for each step in the process. /15/ The court of appeals' cavalier disregard of the 60-day limitation, flies in the face of another of this Court's precedents, Califano v. Sanders, 430 U.S. 99 (1978). In Sanders, the Court unanimously held that a court does not have jurisdiction to review the denial of a claimant's request to reopen a decison on a claim that the claimant previously allowed to become final and binding when he failed to seek review within 60 days. 430 U.S. at 107-109. The court of appeals' disregard of these limitations in this case is far more extreme than that which the Court rejected in Sanders. Here, the court of appeals affirmed the district court's exercise of jurisdiction over thousands of stale claims without regard to whether the individual claimants had first requested the Secretary to reopen her previous decision that the claimant himself had allowed to become final and binding, as the claimant had done in Sanders. It is the handful of class representatives in this case who are requesting that these claims of thousands of other individuals be reopened. The class representatives have no standing to seek reopening of closed cases to which they were not parties (see 42 C.F.R. 404.987(b) and 416.1487(b)); far less do they have a jurisdictional basis for bringing a class action to have a court order the Secretary to reopen such claims. See Califano v. Yamasaki, 442 U.S. 682, 704 (1979). When the matter of a stay previously was before the Court, none of the Justices agreed with the proposition that the district court could excuse claimants from complying with the 60-day limitations period for seeking judicial review and exercise jurisdiction over those claims as well. Relying upon this Court's decision in Califano v. Sanders, Justice Stevens, joined by Justice Blackmun, expressly agreed with the majority of the Court that the Secretary was entitled to a stay with regard to claimants who had not sought review within 60 days and thereby allowed the administrative decisions denying their claims to become final and binding ((Stevens, J., dissenting), slip op. 3, 6 n.4). Justice Brennan, joined by Justice Marshall, did not disagree with this view of the 60-day limitation. He noted only the court of appeals' conclusion in its opinion denying a stay that the Secretary had waived this objection by failing to raise it in district court ((Brennan, J., dissenting) slip op. 3). The court of appeals now has acknowledged that it previously erred in believing that the Secretary had failed to raise the objection in district court and thereby waived it (App. A, infra, 28). Thus, even assuming that a court could overlook a respondents' failure to comply with the 60-day limitations period Congress has made a condition of the waiver of sovereign immunity and exercise of jurisdiction under 42 U.S.C. 405(g) /16/ there is no basis for such a finding of waiver here. The court of appeals' suggestions of ways in which the unanimous holding in Sanders and this Court's considered judgment on this point on the prior stay application might be avoided are wholly insubstantial. The court's suggestion that the 60-day limitations period in 42 U.S.C. 405(g) would be an "unduly burdensome procedural obstacle" to obtaining access to the courts on a constitutional claim (App. A, infra, 28-31) borders on the frivolous. First, as we have explained, respondents' arguments on the merits are not constitutionally based. Second, in the numerous cases in which the Court has considered constitutional claims under 42 U.S.C. 405(g), it has never intimated that the 60-day period is constitutionally insufficient. Third, the claimant will have received a formal notification from the Secretary that his claim for benefits has been denied, it should not be difficult for him to decide within 60 days whether he wishes to seek review of that decision or accept it. The clear policy in 42 U.S.C. 405(g) in favor of repose and against relitigation of stale claims (Califano v. Sanders, 430 U.S.C. at 108) cannot be avoided simply because the claimant has cast his arguments in constitutional terms. The court of appeals also suggested (App. A, infra, 31-32) that the 60-day limitations period could be "waived" by a court even over the Secretary's objection in this case, because, in the court's view, the Secretary has acted in bad faith and the interest in repose therefore should give way to the claimants' interest in adequately preparing their cases for judicial review. As we have explained, the court's assertion that the Secretary has acted in bad faith by following her nationwide regulations is entirely unwarranted and unsupported. Moreover, on the other side of the equation, there is no indication whatever that any of the thousands of individuals whose cases the named plaintiffs seek to have reopened were actively "preparing their cases" for litigation during the period prior to the filing of this class action (App. A, infra, 32). For all that appears, they abandoned their claims altogether after receiving an administrative decision at some level denying their claims. Finally, the court of appeals made the truly extraordinary suggestion that the 60-day limitations period for seeking judicial review under 42 U.S.C. 405(g) could be deemed tolled retroactively to the date on which the class representative first filed an administrative appeal raising the medical improvement issue (App. A, infra, 32-34). Such a result would cause the wholesale abandonment of limitations periods in any case in which a claimant could identify a question of law or policy in his case that was previously raised in another case, even at the earliest stages of administrative review. This would create an unmanageable standard of finality in programs involving millions of claims. d. Mandamus Jurisdiction The court of appeals also concluded (App. A, infra, 34-37) that even if the 60-day limitations period bars the exercise of jurisdiction under 42 U.S.C. 405(g) over closed cases, the district court could circumvent that limitation simply by resorting to mandamus jurisdiction. We have explained in our Reply Brief in Ringer (at 16-20) that Congress established a self-contained system for administrative and judicial review under 42 U.S.C. 405(g) and that, in 42 U.S.C. 405(h), it barred other avenues of judicial review of the Secretary's decisions, including the exercise of mandamus jurisdiction under 28 U.S.C. 1361. We will not repeat that analysis here. Suffice it to say that the court of appeals' resort to mandamus jurisdiction over claims for which jurisdiction under 42 U.S.C. 405(g) is clearly time-barred vividly demonstrates the defects in permitting the limitations Congress carefully and deliberately placed in the self-contained review procedures in 42 U.S.C. 405 to be circumvented simply by raising the same contentions under general jurisdictional grants. /17/ 3. The Balance of The Equities Warrants A Stay The balance of the equities also plainly does not support the denial of a stay here. Congress itself weighed the equities of disability claimants against the need for orderly administrative and judicial review when it enacted the statutory exhaustion and jurisdictional requirements and limitations on payment of benefits that respondents seek to avoid. Moreover, we note that the class members themselves abandoned their claims by allowing the interlocutory decisions terminating their benefits to become final. They do not have a strong equitable claim to have benefits reinstated and their cases reopened under a "preliminary injunction" pending this Court's consideration of their theories for relief that find no support in this Court's prior decisions. CONCLUSION The application for a stay pending the filing and disposition of a petition for a writ of certiorari should be granted. /18/ Respectfully submitted. REX E. LEE Solicitor General MARCH 1984 /1/ We have attached hereto (A) the court of appeals' opinion of February 22, 1984; (B) the court of appeals' order of February 22, 1984 regarding the mandate; (C) the district court's June 16, 1983 order with attached exhibits; (D) the district court's accompanying memorandum of decision; (E) the district court's memorandum of decision dated July 27, 1983 regarding recoupment of interim disability benefits; (F) the district court's August 4, 1983 order amending its June 16, 1983 order and memorandum decision; and (G) the affidavit of Jean Hall Hinckley, Acting Deputy Associate Commissioner, Office of Disability, Social Security Administration. /2/ Judge Boochever disagreed with the majority on this ground, concluding that the district court had no jurisdiction under 42 U.S.C. 405(g) over such claims (App. A, infra, 52). /3/ The court of appeals' extraordinary action actually shortening the time for issuance of its mandate in a case in which a Circuit Justice already has granted a stay that the full Court sustained must be viewed as a denial of any further relief by that court, except to the limited extent of the 10 days it permitted the Secretary to return to this Court for a stay. See S. Ct. R. 44.4. /4/ The Second Circuit, in conflict with the decision below, has held that full exhaustion of administrative remedies is required in a case such as this. See Smith v. Schweiker, 709 F.2d 777 (1983). /5/ See, e.g. Kuehner v. Schweiker, supra, in which the Solicitor General has determined that a petition for a writ of certiorari will be filed; Mental Health Ass'n of Minnesota v. Heckler, 720 F.2d 965 (8th Cir. 1983); City of New York v. Heckler, Civ. No. CV-83-0457 (E.D.N.Y. Jan. 1, 1984), appeal pending, No. 84-6037 (2d Cir.); Trujillo v. Heckler, Civil No. 82-k-1505 (D. Colo. Dec. 15, 1983), appeal pending, No. 83-2413 (10th Cir); Hyatt v. Heckler, No. C-C-83-655-17 (W.D.N.C. Feb. 14, 1984); Doe v. Heckler, Civ. Action No. M-83-2218 (D. Md. Dec. 13, 1983); Graham v. Heckler, 573 F. Supp. (N.D.W.Va. 1983). /6/ These regulations had been issued in proposed form in 1979, at a time when SSA also made clear that it already had altered its policy to focus on the individual's current status rather than on the question of the relative improvement of his medical condition. 44 Fed. Reg. 33879, 33882 (1979). The Secretary's policy on this issue therefore was clear when Congress enacted the requirement in 1980 that the Secretary conduct a periodic review of disability claimants (42 U.S.C. (Supp. V) 421(h)). Congress took no action to require a different approach. /7/ This Court recently held in another case involving the allocation of burdens of proof in administrative proceedings that the interpretation of the statute by the agency charged with its implementation should be sustained if it is a permissible one, even if the court might reasonably have construed the statute in a different manner. NLRB v. Transportation Management Corp., No. 82-168 (June 15, 1983), slip op. 8-10. Surely, the Secretary's approach here rests on a permissible construction of the Social Security Act, even though the court in Patti applied different reasoning in that particular claimant's case. We note as well that Congress has explicitly directed the Secretary "to assure effective and uniform administration of the disability insurance program throughout the United States." 42 U.S.C. (Supp. V) 421(a)(2). The Secretary cannot lightly abandon that statutory directive on every occasion in which an appellate decision might suggest a different view -- often in dicta or different circumstances or, as in Patti, without full consideration of the relevant issues. /8/ The result would be, in effect, to convert every Social Security case involving an individual claimant, such as Patti and Finnegan, into a class action brought on behalf of all present and future Social Security claimants in the Ninth Circuit. But this would be so only if the claimant won. If the claimant lost, the Secretary could not invoke the doctrine of collateral estoppel against other claimants who were not parties to the case. /9/ Consistent with the Court's decision in Estate of Donnelly, and contrary to the court of appeals' assertion (App. A, infra, 49-50 n.12), we have been informed by the Office of the Chief Counsel of the IRS that its rulings nonacquiescing in circuit precedent sometimes do apply within the particular circuit. /10/ See 42 U.S.C. 405(h) (findings and decisions of the Secretary after a hearing are binding "upon all individuals who were parties to such hearing"); 20 C.F.R. 404.950(f) and 416.1450(f) (collateral estoppel effect may be given to an issue previously decided in a claim "involving the same parties" but arising under another title of the Act). /11/ The court of appeals also suggested that respondents have raised a nonfrivolous due process question by contending that the Secretary's failure to apply the reasoning of Patti and Finnegan renders their post-deprivation administrative hearings "meaningless" (App. A, infra, 48 n.10). This suggestion is wholly without merit. The Secretary will continue to afford claimants a reasonable opportunity to be heard on their claims for benefits, and indeed benefits have actually been awarded to many class members without application of the medical improvement standard they urge. The fact that in those proceedings the Secretary might not apply a particular procedural or evidentiary rule that itself is not constitutionally compelled does not rise to the level of a constitutional defect. Equally without merit is the court of appeals' suggestion (App. A, infra, 48-49 n.10) that a due process violation might occur if the Secretary terminates their benefits without coming forward with evidence. This Court made clear in Mathews v. Eldridge, which involved a due process challenge to the termination of benefits, that the claimant bears the burden of proving that he is still disabled. 424 U.S at 336. Moreover, Congress surely has the power to treat each three-year period as a separate period of eligibility for which the claimant must separately establish his entitlement of benefits. /12/ Accord, Mathews v. Diaz, 426 U.S. at 76-77; Weinberger v. Salfi, 422 U.S. at 767, n.10, discussing Weinberger v. Wiesenfeld, 420 U.S. 636, 641 n.8 (1975); cf. Schweiker v. Wilson, 450 U.S. 221, 227-228 (1981). /13/ The court of appeals clearly erred in characterizing Eldridge as a case in which the Court held that a court may decline to defer to the Secretary's judgment regarding the "futility" of exhaustion. Such a holding would have been contrary to the Court's repeated rejection of precisely that contention in Salfi. In Eldridge, the Court concluded that because of the collateral nature of the particular issue involved, deference to the Secretary's judgment that all judicial review should be postponed until the Secretary had disposed of the entire claim for benefits was inappropriate. 424 U.S. at 330. The concept of "futility" was not mentioned and played no role in the Court's holding on the exhaustion point. /14/ The court of appeals' suggestion (App. A, infra, 24) that the absolute jurisdictional requirement that respondents present a claim for benefits to the Secretary was satisfied here simply by virtue of the fact that the Secretary terminated benefits they previously were receiving is inconsistent with this Court's decision in Eldridge. There, the Court relied upon the fact that the claimant actually had contested the state agency's planned termination of his benefits. 424 U.S. at 329. See Heckler v. Lopez (Rehnquist, Circuit Justice), slip op. 7. The court of appeals also suggested that class members might have satisfied the presentation requirement by returning a questionnaire to the state agency. The questionnaire, however, is part of the state agency's fact-gathering process prior to the time that it issues a tentative determination. 424 U.S. at 324. In Eldridge, after the state agency issued a tentative decision that his disability had ceased, the claimant submitted a letter challenging that conclusion. Ibid. The class in this case is not confined to individuals who took that step, or even to individuals who returned a questionnaire. /15/ See 42 U.S.C. 405(b) and (g), 1383(c)(1) and (3); 42 C.F.R. 404.909(a)(1), 404.933(b)(1), 404.968(a)(1), 404.981, 416.1333(b), 416.1468(a) and 416.1481. /16/ Most of the class members whose closed cases respondents seek to have reopened never exhausted their administrative remedies and obtained a decision by the Appeals Council. They thus failed to seek either administrative or judicial review within 60 days of the interlocutory administrative decision terminating their benefits. Even assuming that a court could deem the Secretary to have waived an objection to a claimant's failure to comply with the 60-day period in 42 U.S.C. 405(g) for seeking judicial review of a final decision terminating benefits, this would not overcome the holding of Sanders that there is no jurisdiction at all under 52 U.S.C. 405(g) over an action seeking to compel the Secretary to reopen an interlocutory administrative decision that the claimant allowed to become final and binding by not seeking the next level of administrative review in the time allowed. Moreover, the observations in Salfi and Eldridge that even the 60-day limitation on judicial review under 42 U.S.C. 405(g) could be deemed waived if not raised in district court (422 U.S. at 328 n.9; 424 U.S. 764) were dicta, because the claimants in those cases in fact sought judicial review within 60 days of the last administrative decision. /17/ Because the district court was so clearly without jurisdiction here, we will not repeat our submission on the prior stay application (at 15-16) and in our Brief (at 46-50) and Reply Brief (at 18-20) in Heckler v. Day that a court in any event is without authority to award interim benefits as a matter of what the court of appeals termed "equitable discretion" to claimants who have not been found by the Secretary or a court to be currently disabled and entitled to benefits. /18/ We have furnished counsel for respondents in Heckler v. Ringer and Heckler v. Day, with a copy of this stay application because of the relationship of some of the issues in this case to the issues presented in those cases. Counsel for respondents herein have been sent copies of our briefs in Ringer and Day. APPENDIX