MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, ET
AL., PETITIONERS V. CITY OF NEW YORK, ET AL.

   No. 84-1923

   In the Supreme Court of the United States

   October Term, 1984

   The Solicitor General, on behalf of the Secretary of Health and
Human Services and the Acting Commissioner of Social Security,
petitions for a writ of certiorari to review the judgment of the
United States Court of Appeals for the Second Circuit in this case.

   Petition for a writ of certiorari to the United States Court of
Appeals for the Second Circuit

                      PARTIES TO THE PROCEEDINGS

   The petitioners are Margaret M. Heckler, Secretary of Health and
Human Services, and Martha McSteen, the Acting Commissioner of Social
Security.

   The eight individual respondents are Jane Does I-III and Richard
Roes I-V.  These eight respondents are representatives of the
following class certified by the district court (App., infra, 36a):

      All individuals residing in the State of New York who have
      applied for or received Title II and/or Title XVI benefits and
      who, between April 1, 1980 and May 15, 1983, were found by the
      New York State Office of Disability Determinations to have a
      functional psychotic or functional non-psychotic mental
      impairment which is severe (i.e., determined under 20 C.F.R.
      Section 404.1520(c) or Section 416.930(c) to require evaluation
      under Appendix I of that Regulation), and whose applications for
      benefits have been denied or whose benefits have been or will be
      terminated, on the basis of defendants' determination that such
      persons are capable of substantial gainful activity.

The governmental respondents are the City of New York, the New York
City Health and Hospitals Corporation, the State of New York, the
Commissioner of the New York State Department of Social Services, and
the Commissioner of the New York State Office of Mental Health.

         TABLE OF CONTENTS

   Opinions below
   Jurisdiction
   Statutory and regulatory provisions involved
   Statement
      A. The statutory and regulatory framework
          1. Procedural provisions
          2. Substantive provisions
      B. The proceedings in this case
   Reasons for granting the petition
   Conclusion
   Appendix A
   Appendix B
   Appendix C
   Appendix D
   Appendix E
   Appendix F
   Appendix G

                            OPINIONS BELOW

   The Opinion of the court of appeals (App., infra, 1a-23a) is
reported at 742 F.2d 729, and the opinion of the court of appeals
denying the Secretary's petition for rehearing (App., infra, 24a-29a)
is reported at 755 F.2d 31.  The opinion of the district court (App.,
infra, 30a-63a) is reported at 578 F.Supp. 1109.

                             JURISDICTION

   The judgment of the court of appeals was entered on August 27,
1984, and a petition for rehearing was denied on February 7, 1985
(App., infra, 24a-29a).  By order dated April 29, 1985, Justice
Marshall extended the time within which to file a petition for a writ
of certiorari to and including June 7, 1985.  The jurisdiction of the
Court is invoked under 28 U.S.C. 1254(1).

             STATUTORY AND REGULATORY PROVISIONS INVOLVED

   Section 205(g) of the Social Security Act, 42 U.S.C. 405(g);
Section 5 of the Social Security Disability Benefits Reform Act of
1984, Pub.L.No. 98-460, 98 Stat. 1801;  and 20 C.F.R. 404.1520 are
reproduced at App., infra, 71a-77a.

                          QUESTIONS PRESENTED

   1. whether, in this class action under 42 U.S.C. 405(g) challenging
the interpretation and application by the Secretary of Health and
Human Services of regulations pertaining to eligibility for disability
benefits under the Social Security Act, the district court correctly
included within the class numerous claimants who had not exhausted
their administrative remedies and therefore had no obtained a "final
decision" of the Secretary on their individual claims for benefits.

   2. Whether, in light of the requirement in 42 U.S.C. 405(g) that a
claimant must seek judicial review within 60 days of the Secretary's
final decision on his claim for benefits, the district court correctly
included within the class numerous claimants who had received a final
decision on their individual claims for benefits more than 60 days
before this class action was filed.

   3. Whether, if the district court did not have jurisdiction under
42 U.S.C. 405(g) over the claims of those class members who had
received a final decision more than 60 days before this class action
was filed, the court nevertheless could assert jurisdiction over those
same claims under the mandamus statute, 28 U.S.C. 1361.

                               STATEMENT

   This is a class action brought on behalf of New York residents
challenging the interpretation by certain Social Security
Administration personnel of several regulations that implement the
substantive standards of eligibility for disability benefits under
Title II and Title XVI of the Social Security Act.  The merits of the
dispute are not at issue here.  Instead, in this petition, we seek
review of the court of appeals' affirmance of the d istrict court's
sweeping judgment that:  (i) awarded relief to those class members who
were still in the process of exhausting their administrative remedies
when that judgment was entered;  and (ii) ordered the secretary to
reopen administrative decisions denying the claims of thousands of
other class members that had become final and binding when the
claimants involved failed to seek further administrative review or
judicial review within 60 days.  Under this Court's rulings, the
district court clearly had no jurisdiction over the claims of these
class members under 42 U.S.C. 405(g) or 28 U.S.C. 1361.

               A. The Statutory and Regulatory Framework

   Title II of the Social Security Act provides, inter alia, for the
payment of disability insurance benefits to persons whose disability
prevents them from pursuing gainful employment.  42 U.S.C. 423.
Disability benefits also are payable under the supplemental Security
Income (SSI) Program established by Title XVI of the Act.  42 U.S.C.
1382(a).  "The disability programs administered under Titles II and
XVI 'are of a size and extent difficult to comprehend.' Richardson v.
Perales, 402 U.S. 389, 399 (1971).  Approximately two million
disability claims were filed under these two titles in fiscal year
1983." Heckler v. Day, No. 82-1371 (May 22, 1984), slip op. 2
(footnote omitted).  To aid in the administration of these programs,
the Secretary of Health and Human Services has promulgated detailed
regulations governing both the procedures for the adjudication of
claims for benefits and the substantive standards of eligibility.

                       1. Procedural Provisions

   "To facilitate the orderly and sympathetic administration of the
disability program(s) * * *, the Secretary and Congress have
established an unusually protective * * * process for the review and
adjudication of disputed claims." Heckler v. Day, slip op. 2. If it is
determined at any stage of this multi-stage process that the
indivudual is eligible for benefits (and if the individual has not
been receiving benefits during that review process (see pages 5-6,
infra)), he is entitled to retroactive payments for the period of his
eligibility.  See Mathews v. Eldridge, 424 U.S. 319, 339 (1976).

   a. Congress has directed that the determination whether an
individual is under a disability shall be made in the first instance
by a state agency, pursuant to regulations, guidelines, and
performance standards established by the Secretary through the Social
Security Administration (SSA).  42 U.S.C. 421(a), 1383b(a);  20 C.F.R.
404.1503, 416.903.  See Heckler v. Day, slip op. 2, 12.  The first
stage of administrative review is the initial determination, which the
state agency renders on the basis of its consideration of an
application submitted by a person seeking benefits for the first time
or on the basis of the agency's assessment of the continuing
eligibility of a person who already is receiving benefits.  The
Secretary, on her own motion, may review the determination by the
state agency that a person is or is not under a disability.  42 U.S.C.
421(c)(1). In addition, Congress has directed the Secretary to review
specified percentages of determinations by state agencies in cases
under Title II in which the claimant is found to be disabled. 42
U.S.C. 421(c)(2) and (3).  This quality review process was instituted
because of Congress's concern about a "marked loss of quality and
uniformity" in state agency decisions.  Heckler v. Day, slip op. 13
n.29.  The review of state agency decisions is performed by SSA's
regional office (Tier II), and the regional office's performance in
turn is subject to review by SSA's Central office in Baltimore (Tier
III).  See App., infra, 34a-36a.

   b. If the state agency makes an initial determination that a new
applicant is not disabled or that the disability of a current
recipient has ceased, the individual may request a de novo
reconsideration by the state agency.  20 C.F.R. 404.904,
404.907-404.921, 416.1405, 416.1407-416.1421.  /1/ Governing
regulations provide -- and the individual is explicitly notified --
that he must request reconsideration within 60 days of his receipt of
the adverse initial determination.  20 C.F.R. 404.904, 404.909(a)(1),
416.1404, 416.1409(a).  If he does not do so, the adverse initial
determination becomes "binding" upon the claimant. 20 C.F.R. 404.905,
416.1405.

   c. Under 42 U.S.C. 421(d), if an individual is dissatisfied with
the decision by the state agency after its initial . determination and
reconsideration of the claim he "shall be entitled to a hearing
thereon by the Secretary to the same extent as is provided in (42
U.S.C. 405(b))." See also 42 U.S.C. 1383(c)(1);  20 C.F.R.
404.944-404.965, 416.1429-416.1465.  The Act requires that an
individual request such a hearing within 60 days of the state agency
decision (42 U.S.C. 405(b)(1), 1383(c)(1)), and implementing
regulations expressly provide that the state agency's decision that
the claimant is not disabled becomes "binding" unless he requests a
hearing within that period.  20 C.F.R. 404.920(a), 404.921,
404.933(b), 416.1404(b)(3), 416.1405, 416.1420(a), 416.1421,
416.1433(b).

   The evidentiary hearing is conducted by an administrative law judge
(ALJ) within SSA's Office of Hearings and Appeals. The ALJ is directed
to "look() fully into the issues" (20 C.F.R. 404.929, 404.944,
416.1429, 416.1444).  See Heckler v. Campbell, 461 U.S. 458, 469 n.12
(1983).  Althought the ALJ must follow the Social Security Act
implementing regulations, and formal Social Security rulings (SSRs)
(20 C.F.R. 422.408), the ALJ is not bound by the programs Operations
Manual System (POMS) and other instructional material that SSA's
Office of Operational Policies and Procedures transmits to the state
agencies to guide them in their preliminary evaluation of disability
claims.  See Heckler v. Ringer, No. 82-1772 (May 14, 1984), slip op,
2;  S.Rep. 94-466, 98th Cong., 2d Sess. 18-19 (1984);  H.R.Rep.
98-618, 98th Cong., 2d Sess. 20-22 (1984).

   Because eligibility for SSI benefits is based on need (42 U.S.C.
1382(a)), the Secretary implemented this Court's decision in Goldberg
v. Kelly, 397 U.S. 254 (1970), by providing that, if an individual has
been receiving benefits under Title XVI, payment of those benefits may
be continued after an initial determination by the state agency that
he no longer is eligible for disability benefits until the ALJ in SSA
has rendered a decision on the claim.  20 C.F.R. 416.1336(b).  By
contrast, this Court held in Mathews v. Eldridge, supra, that in the
case of disability benefits under Title II, which are not based on
need, the Due Process Clause does not require the Secretary to
continue payments following an adverse state agency determination
until the individual has an opportunity for an ALJ hearing in SSA.
424 U.S. at 339-349.

   Notwithstanding the holding in Eldridge, Congress enacted temporary
legislation in 1982 permitting the claimant in a Title II disability
cessation case to elect to continue to receive benefits pending
receipt of the ALJ's decision, subject to recoupment if the ALJ agrees
with the state agency that the claimant's disability has ceased.  42
U.S.C. 423(g), as added by Pub. L. No. 97-455, Section 2, 96 Stat.
2498.  In the Social Security Disability Benefits Reform Act of 1984,
Pub. L. No. 98-460, Section 7 (a) (2), 98 Stat.  1803, Congress
extended that authorization until January 1, 1988.  Congress in the
1984 Act also enacted a specific statutory authorization for the
continued payment of SSI benefits under Title XVI pending an ALJ
decision if the state agency has made an initial determination that
the individual's disability has ceased.  Section 7(b), 98 Stat. 1803
(to be codified at 42 U.S.C. 1383(a)(7)).  By contrast, Congress has
not provided any similar authorization for the payment of benefits
during the administrative appeals process to new applicants who were
found by the state agency not to be disabled.

   d. If the decision by the ALJ after a hearing under either Title II
or Title XVI is adverse to the claimant, he then may seek review by
the Appeals Council in SSA.  20 C.F.R. 404.967-404.983,
416.1467-416.1483.  The regulations provide that if the claimant does
not seek Appeals Council review within 60 days or such further period
as the Secretary permits, the ALJ's decision is "binding." 20 C.F.R.
404.955(a), 404.968(a)(1), 416.1455(a), 416.1468.

   e. Only after the Appeals Council has either denied review of the
ALJ's decision, or has granted review and rendered its own decision on
the merits, is the Secretary deemed to have rendered her "final
decision" or "final determination" on the claim, which is then subject
to judicial review in federal district court pursuant to 42 U.S.C.
405(g).  See 42 U.S.C. 421(d), 1383(c)(3);  20 C.F.R. 404.900(a)(5),
404.981, 416.1400(a)(5), 416.1481.  The Act requires that judicial
review by "commenced within sixty days after the mailing to (the
claimant) of notice" of the Secretary's final decision, "or within
such further time as the Secretary may allow." 42 U.S.C. 405(g).  If
judicial review is not sought within the time allowed, the Appeals
Council's decision (or the ALJ's decision, if the Appeals Council
denied review) becomes "binding" upon the claimant. 20 C.F.R. 404.981,
404.982, 416.1481, 416.1482.

   f. Although an adverse decision at any step of the administrative
process becomes final and binding upon the claimant if he does not
seek further review within the time allowed, the Secretary has
provided by regulation that such a decision may be reopened within 12
months for any reason, within two or four years for good cause, and at
any time if the decision was obtained by fraud or similar fault.  20
C.F.R. 404.987-404.989, 416.1487-416.1489.  However, the Secretary's
denial of a request to reopen is not subject to administrative or
judicial review. 20 C.F.R. 404.903(1), 416.1403(a)(5).  See Califano
v. Sanders, 430 U.S. 99, 108 (1977).

                       2. Substantive Provisions

   Under Title II and Title XVI of the Social Security Act, disability
benefits may be paid to an individual who has a "medically
determinable physical or mental impairment" that is "of such severity
that he is not only unable to do his previous work but cannot,
considering his age, education, and work experience, engage in any
other kind of substantial gainful work which exists in the national
economy." 42 U.S.C. 423(d)(1)(A) and (2)(A), 1382c(a)(3)(A) and (B).
In 1978 the Secretary promulgated regulations implementing these
statutory definitions of the term "disability." Heckler v. Campbell,
461 U.S. at 461.  See 20 C.F.R. Pt. 404, Subpt. P.; id. Pt. 416,
Supbt. I.

   The regulations establish a five-step "sequential evaluation"
approach for determining whether a person is disabled.  20 C.F.R.
404.1520(a), 416.920(a).  At the first step, the state agency official
or the ALJ determines whether the claimant is engaged in work that
constitutes substantial gainful activity.  If so, the claimant will be
found not to be disabled, and the sequential evaluation process goes
no further.  20 C.F.R. 404.1520(b), 416.920(b).  At the second step,
the decision-maker decides whether the claimant's impairment is
"severe" -- i.e., whether it limits his "physical or mental ability to
do basic work activities" (20 C.F.R. 404.1520(c), 404.1521,
416.920(c), 416.921).  This threshold severity determination is made
on the basis of medical factors alone, without consideration of the
claimant's age, education, or work experience.  If the impairment is
not "severe," the claimant is found not to be disabled.

   At the third step, the state agency official or ALJ determines
whether the claimant's physical or mental impairment meets or equals
any of the listed impairments that are deemed to be disabling without
considering the claimant's age, education, or work experience.  20
C.F.R. 404.1520(d), 416.920(d).  If the impairment does not meet or
equal the listings, step four of the sequential evaluation process
provides for the decision-maker to determine the claimant's "residual
functional capacity" (RFC). In making this determination in the case
of a mental imapirment, the relevant factors include the claimant's
"ability to understand, to carry out and remember instruction, and to
respond appropriately to supervision, co-workers and work pressures in
a work setting." 20 C.F.R. 404.1545(c), 416.945(c).  The
decision-maker than must determine whether the individual's RFC
permits him to do his past work.  If he can, he is found not to be
disabled.  20 C.F.R. 404.1520(e), 416.920(e).

   If the claimant cannot do his past work, the decision-maker then
proceeds to step five, at which he must consider the claimant's RFC,
together with the vocational factors of age, education, and work
experience, in order to determine whether the claimant can do other
jobs that exist in the national economy.  20 C.F.R. 404.1520(f),
416.920(f).  This determination at step five ordinarily is made by
reference to the medical-vocational guidelines, which set forth rules
to identify whether jobs requiring specific combinations of attributes
exist in the national economy. 20 C.F.R.Pt. 404., Subpt.P, App. 2.
See generally Heckler v. Campbell, 461 U.S. at 460-462, 467-468;
App., infra, 3a, 32a-33a.

                    B. The Proceedings In This Case

   1. a. This class action was filed in the United States District
Court for the Eastern District of New York on February 8, 1983
(C.A.App. 8-32), and an amended complaint was filed on October 11,
1983 (C.A.App. 54-88).  The named plaintiffs, respondents herein, are
eight individuals (identified as Jane Does I-III and Richard Roes I-V)
who had received or applied for disability benefits under Title II or
Title XVI of the Social Security Act (C.A. App. 12-15, 59-66), and the
City of New York, the New York City Health and Hospitals Corporation,
the State of New York, and two state officials (C.A. App. 11-12,
58-59).

   The plaintiffs challenged an interpretation of the sequential
evaluation regulations given by certain SSA personnel to the state
agency responsible for making disability determinations in New York
(C.A. App. 22-27, 74-81).  Several memoranda reflecting the
interpretation stated that if the claimant's mental impairment is
found at step three of the sequential evaluation process not to meet
or equal the listings, it will "generally follow" that the claimant
has the RFC at least for unskilled work and that a finding of
disability at step four or five, while "possible," is "rare" (C.A.
App. 22-23, 75-76).  Plaintiffs contended that these and other
memoranda gave "improper weight" to the fact that the claimant's
impairment did not meet or equal the listings and in effect created a
"presumption" that such a claimant is able to do unskilled work,
without an adequate individualized evaluation of his capacity to
engage in substantial gainful activity.  In the plaintiffs' view, such
an evaluation should consider such factors as the claimant's recent
prior work history, his reaction to stressful situations, the risk and
effect of a possible recurrence of symptoms, and an analysis of the
claimant's performance in a work-like setting (C.A. App. 29-30, 83).
The plaintiffs also alleged that the interpretation of the regulations
they challenged was applied by SSA, in the Tier II and Tier III
quality review process (see pages 3-4, supra), in reversing initial
determinations by the New York state agency that particular claimants
were disabled on the basis of mental impairment (C.A. App. 25,79).

   b. Before this suit was filed, another district court had granted a
preliminary injunction in a class action raising a similar challenge.
Mental Health Association v. Schweiker (Minnesota Mental Health), 554
F.Supp. 157 (D.Minn. 1982), aff'd, 720 F.2d 965 (8th Cir. 1983).  In
response to that suit, the Commissioner of Social Security, on January
3, 1983, sent a memorandum to all Regional Commissioners of SSA, all
SSA field assessment officers, and all state agencies that make
disability determinations (DX M (App., infra, 69a-70a)).  The
Commissioner's memorandum made clear that a finding that a claimant is
able to engage in substantial gainful activity cannot be justified
solely on the basis of a finding at step three of the sequential
evaluation process that the mental impairment does not meet or equal
the listings.  Instead, the memorandum stressed that, under existing
regulations and POMS instructions, the sequential evaluation process
must continue to a consideration at steps four and five of the
claimant's RFC and vocational factors. Ibid.  The Commissioner's
memorandum instructed the Regional Commissioners and SSA field
assessment officers to work with state agency administrators
"immediately" in order "to assure that these principles are reviewed
with every adjudicator" (id. at 69a).  /2/

   c. The district court in the instant case rendered its decision on
January 11, 1984 (App., infra, 30a), more than a year after the
Commissioner sent the corrective instructions just discussed.  The
court acknowledged that the challenged interpretation was no longer in
effect (id. at 39a).  /3/ Nevertheless, Nevertheless, the district
court reached the merits of that interpretation, found it to be
contrary to the Act and regulation, and ordered broad relief to the
members of the certified class (id. at 31a-42a, 60a-63a).  That class,
as amended, consists of all New York residents who, between April 1,
1980 and May 15, 1983, were found by the New York state agency to have
a severe functional psychotic or functional non-psychotic mental
impairment that did not meet or equal the listings, and whose
applications had been denied or benefits terminated because of the
Secretary's determination that they were capable of performing
substantial gainful activity (id. at 65a).  The court rejected the
Secretary's contention that it could not include within the class
under 42 U.S.C. 405(g) any persons who had not exhausted their
administrative remedies or sought judicial review within 60 days of
the Secretary's final decisions denying their individual claims for
benefits (App., infra, 43a-46a, 59a-60a).  As relief, the court
ordered the Secretary to reopen all adverse administrative decisions
affecting the class members, although it provided that any class
member who had an active administrative appeal of such a state agency
decision pending before an ALJ or the Appeals Council could elect to
have his case decided on that appeal instead of by reopening (App.,
infra, 65a-66a).  /4/

   2. a. The court of appeals affirmed the district court's judgment,
rejecting the Secretary's jurisdictional arguments (App., infra,
1a-23a).  The court of appeals acknowledged that the Secretary's
jurisdictional arguments (App., infra, 1a-23a). The court of appeals
acknowledged that the Secretary had not waived the requirement under
42 U.S.C. 405(g) that a claimant exhaust his administrative remedies
through the Appeals Council stage, but it concluded that judicial
waiver" of that requirement was appropriate (App., infra, 13a).  The
court reached this result by following what it termed a "general
approach" to the exhaustion question, under which "no one factor is
critical" and a court may "balanc(e) the competing considerations to
arrive at a just result under the circumstances presented" (ibid.).

   Applying this approach, the court of appeals acknowledged that the
class members' argument that the Secretary had failed to assess their
RFC on an individualized basis was not "wholly" collateral to their
claims for benefits, as this Court had required in Mathews v.
Eldridge, 424 U.S. 319, 330 (1976), and Heckler v. Ringer, slip op. 14
(App.,infra, 14a).  But the court found it sufficient that that
argument was "substantially" collateral, distinguishing Ringer on the
ground that it involved a challenge to the Secretary's "substantive
standards," while in this case the plaintiffs were challenging what
the court characterized as a "procedural irregularity" (ibid.).  The
court also concluded that it could excuse exhaustion of administrative
remedies because, in its view, exhaustion would be "futile" (id. at
15a).

   The court of appeals acknowledged that some individual class
members could have prevailed on their claims for benefits if they had
pursued administrative appeals, but it reasoned that their asserted
"procedural right" to have the Secretary make an individualized
assessment of RFC could not be vindicated on such an appeal (App.,
infra, 15a).  The court also believed that the claimants should not
have to undergo the "ordeal" of pursuing the administrative process
(id. at 14a).  The court added that it saw no reason to require
exhaustion in order to allow the SSA to apply its "'experience and
expertise'" and "'correct its own error'' (id. at 15a, quoting
Weinberger v. Salfi, 422 U.S. 749, 765 (1975)) -- despite the fact
that the Commissioner of Social Security already had corrected the
agency's error before this suit was filed (see pages 10-11, supra).

   b. The court of appeals also held that this action could be pursued
by all members of the class -- which includes any New York resident
who was found by the state agency not to be disabled at any time on or
after April 1, 1980, almost three years before this suit was filed --
notwithstanding the requirement in 42 U.S.C. 405(g) that a claimant
seek judicial review within 60 days of the Secretary's final decision
on his claim for benefits (App., infra, 15a-18a).  The court noted
that this Court's position on whether the 60-day requirement is
jurisdictional in nature "is not free from doubt" (id. at 16a) and
that there is a conflict in the circuits on that question (id. at
17a).  But "(i)n the absence of an authoritative ruling by the Supreme
Court to the contrary," the court decided to adhere to prior Second
Circuit precedent that the 60-day requirement is not jurisdictional
(ibid.).

   The court of appeals then further held that the running of the
60-day period should be "tolled" during the time that "SSA's policy of
applying the challenged presumption concerning residual functional
capacity remained operative but undisclosed" (App., infra, 18a).  The
court acknowledged that the individual class members knew of the
denial or loss of their benefits, notice of which triggers the running
of the 60-day period under the terms of 42 U.S.C. 405(g), but it
excused compliance with the 60-day filing requirement on the ground
that the claimants did not know that the basis of those decisions was
a systematic "procedural irregularity" that rendered them subject to
court challenge (App., infra, 18a).  In the alternative, the court of
appeals held that, even if the district court did not have
jurisdiction over the claims of certain class members under 42 U.S.C.
405(g) because of the 60-day bar, the court could exercise mandamus
jurisdiction under 28 U.S.C. 1361 to order the reopening of those same
claims (App., infra, 19a-20a).

                   REASONS FOR GRANTING THE PETITION

   This Court repeatedly has made clear that a class may be certified
in an action arising under the Social Security Act only if each of the
class members individually satisfies the requirements prescribed by 42
U.S.C. 405(g).  Califano v. Yamasaki, 442 U.S. 682, 701, 704 (1979);
Mathews v. Diaz, 426 U.S. 67, 71 n.3 (1976);  Weinberger v. Salfi, 422
U.S. 748, 764 (1975);  Heckler v. Lopez, No. A-145 (Oct. 11, 1983),
slip op. 3 (Stevens, J., dissenting in part).  Yet in this case, the
court of appeals held that the district court correctly included
within the class thousands of claimants who did not obtain the
requisite "final decision" of the Secretary on their claims for
benefits or seek judicial review within 60 days of that final
decision.  In place of the clear-cut exhaustion rule, the court of
appeals substituted an ad hoc "balancing" approach that allows a court
to dispense with the exhaustion requirement if necessary to achieve
what the court deems to be a "just result" in the particular
"circumstances presented" (App., infra, 13a).  This holding is flatly
inconsistent with the rulings of this Court, as recently as a year ago
in Heckler v. Ringer, No. 82-1772 (May 14, 1984).  See also Mathews v.
Eldridge, 424 U.S. 319 (1976);  Weinberger v. Salfi, supra.

   Similarly, the court of appeals' view that a court may fashion its
own rules to excuse a claimant's failure to satisfy the 60-day filing
requirement in 42 U.S.C. 405(g) cannot be squared with the decisions
of this Court holding that conditions on waivers of sovereign immunity
define the jurisdiction of the court and must be strictly construed.
What is more, the rationale adopted by the court of appeals -- that
the 60-day filing requirement may be ignored on a statewide basis
because the interpretation of the challenged regulations allegedly
applied in New York was not published -- apparently would dispense
with that requirement whenever a construction of the Act or
implementing regulations that underlies a particular denial of
benefits is reflected in internal operating insturctions.

   The court of appeals' rulings disregarding the explicit "final
decision" and 60-day requirements of 42 U.S.C. 405(g) conflict with
the decisions of other courts of appeals and threaten to make chaos of
the "orderly administrative mechanism" established by the Social
Security Act and implementing regulations for the processing of
millions of claims annually.  Califano v. Sanders, 430 U.S. 99, 102
(1977).  Where, as here, the courts disregard the governing principles
in massive class actions involving thousands of claimants, the result
is to require the reopening of thousands of administrative decisions
that the claimants themselves had allowed to become final and binding
when they failed to pursue their administrative remedies or to seek
judicial review within the applicable time limits.  Review by this
Court therefore is plainly warranted.

   1. a. The court of appeals clearly erred in affirming the district
court's judgment that included within the class numerous individuals
who had not exhausted their administrative remedies through the
Appeals Council stage.  Section 405(g) provides that an individual may
obtain judicial review only after the Secretary has rendered her
"final decision" on his claim for benefits "after a hearing." The
Court held in Salfi that the "final decision" requirement is a
"statutorily specified jurisdictional prerequisite" (422 U.S. at 766).
 Accord, Ringer, slip op. 14.  The Court further held in Salfi that
the meaning of the term "final decision" in 42 U.S.C. 405(g) "is left
to the Secretary to flesh out by regulation" and that she may "specify
such requirements for exhaustion as (s)he deems serve (her) own
interests in effective and efficient administration" (422 U.S. at 766
& n.9).

   "Pursuant to her rulemaking authority (under 24 U.S.C. 405(a)), the
Secretary has provided that a 'final decision' is rendered on a claim
* * * only after the individual claimant has pressed his claim through
all designated levels of administrative review" (Ringer, slip op. 2
(footnote omitted);  see also Salfi, 422 U.S. at 765) -- i.e., only
after the Appeals Council has either rendered a decision or denied the
claimant's request for review.  20 C.F.R. 404.900(a)(5), 404.981,
416.1400 (a)(5), 416.1481.  This requirement has been embodied in the
governing regulations since 42 U.S.C. 405(g) was enacted, /5/
including those in effect when Congress enacted the Title II
disability program in 1954 and 1956 /6/ and the SSI program in 1972.
Congress's provision in 42 U.S.C. 421(d) and 42 U.S.C. 1383 (c)(3) for
a disability or SSI claimant to obtain judicial review "as is provided
in section 405(g)" thus constitutes a ratification of that established
exhaustion requirement and an expression of congressional intent that
it should apply with full force under the disability and SSI programs.
 See Haig v. Agee, 453 U.S. 280, 297-299 (1981);  Lorillard v. Pons,
434 U.S. 575, 580-581 (1978).

   The Secretary has adopted only one exception to the requirement of
full exhaustion.  She has promulgated regulations under which she will
stipulate that the decision at the reconsideration level constitutes
her "final decision" on a particular claim where all other issues have
been resolved and the only obstacle to payment is a statutory
provision that the claimant contends is unconstitutional.  20 C.F.R.
404.923-404.928, 416.1423-416.1428.  See Ringer, slip op. 2-3 n.2.
/7/ This exception has no application here.  Nor did the district
court or the court of appeals suggest that the Secretary had in any
other manner designated that would otherwise be "interlocutory
denials" (Mathews v. Diaz, 426 U.S. at 72) by the state agency or
ALJ's as her "final decisions" on the class members' claims.  See
App., infra, 13a.  The district court therefore had no authority to
include within the class those individuals who had not exhausted their
remedies through the Appeals Council stage.

   b. The court of appeals nevertheless held that the exhaustion
requirement could be "waived" by the district court in this case
(App., infra, 12a-15a).  The court's misuse of terminology is
emblematic of its treatment of the jurisdictional prerequisite of a
"final decision" and its intrusion into matters reserved to the
Secretary.  A court cannot "waive" the application of a procedural
provision that is designed to protect the interests of a party.  Only
the party himself can do that.  The exhaustion requirement protects
the interests of the Secretary, on behalf of the public, in the
effective and efficient administration of the Social Security Act.  It
does so by allowing SSA "an opportunity to correct its own errors, to
afford the parties and the courts the benefit of its experience and
expertise, * * * to compile a record which is adequate for judicial
review," and to ensure that "the claim is neither otherwise invalid
nor cognizable under a different section of the Act" (Salfi, 422 U.S.
at 765).  A court has no authority to "waive" that protection based on
its own de novo weighing of these or other factors that it deems
relevant.

   The circumstances of this case amply demonstrate why a court is
ill-equipped to make that determination.  The Commissioner of Social
Security already had taken steps to correct the apparent error by SSA
personnel before this suit was even filed, thereby making judicial
intervention unnecessary.  Furthermore, the memoranda from SSA
personnel to state agency officials reflecting the interpretation of
the regulations that respondents challenge concededly were not binding
upon the ALJs or the Appeals Council.  As a result, even if the
Commissioner had not taken corrective measures, individual claimants
who received an adverse decision from the state agency were not
prevented from obtaining a full consideration of their RFC or a
favorable decision on the merits from an ALJ or the Appeals Council.
Compare Ringer, slip op. 15.  Thus, it would be especially
inappropriate under the disability programs to dispense with the
exhaustion requirement after the claimant has received an adverse
initial determination or reconsideration decision.  Those
determinations are made by the state agencies, not by SSA itslef.  It
is not until the ALJ hearing stage that the Secretary, through
adjudicators in SSA, has an opportunity as a matter of course to apply
her experience and expertise and correct errors.

   Indeed, the cases of the named plaintiffs indicate that many
individual class members, if they had pursued administrative appeals
to the ALJ stage, would have been found either disabled or not
disabled on grounds other than those relating to the interpretation of
the particular regulation pertaining to RFC. According to the
allegations in the amended complaint, two of the eight named
plaintiffs were found disabled by an ALJ because their impairments met
the listings at step three of the sequential evaluation process, a
ground unrelated to the manner in which RFC should be assessed (C.A.
App. 61 (Jane Doe II), 65 (Richard Roe IV)).  /8/ By the same token,
two other named plaintiffs were denied benefits because their
impairments were found by the ALJ at step two of the sequential
evaluation process to be "nonsevere," a ground unrelated to an
individualized consideration of RFC (C.A. App. 61-62 (Jane Doe III),
63 (Richard Roe II)).  Another plaintiff also was denied benefits
because he was found by the ALJ to have the RFC to do his own past
work, which likewise did not directly implicate the alleged
"presumption" of ability to do unskilled work generally (C.A. App.
65-66 (Richard Roe V)).  /9/ Accordingly, exhaustion was in no sense a
futile or wasteful exercise here.  Compare Ringer, slip op. 15-16 &
n.12)

   c. Where, as here, the Secretary has not waived exhaustion, this
Court has identified only one situation in which a claimant may obtain
judicial review without pursuing his administrative remedies to the
Appeals Council stage.  That exc first recognized in Mathews v.
Eldredge, 424 U.S. at 330, in which the claimant asserted a due
process right under Goldberg v. Kelly, 397 U.S. 254 (1970), to a
hearing before his disability benefits were terminated.  The Court
relied on several factors in holding that the district court had
jurisdiction under 42 U.S.C. 405(g) to decide that legal issue.

   First, the Court observed that the asserted right to a
pretermination hearing was "entirely collateral" to the merits of his
substantive claim of entitlement.  424 U.S. at 330.  Second, the Court
explained that the assertion of a constitutional right to a
pretermination hearing rests on the proposition that full relief
cannot be obtained at a post-termination hearing, and that in light of
Goldberg v. Kelly, supra, the claimant "ha(d) raised at least a
colorable claim that because of his physical condition and dependency
upon the disability benefits, an erroneous termination would damage
him in a way nor recompensable through retroactive payments." 424 U.S.
at 331 (footnote omitted).  Thus, the Court determined that, unlike in
Salfi, the grant or denial of Eldridge's substantive claim for other
reasons at a subsequent stage of the administrative process or on
judicial review would not answer his constitutional challenge.  424
U.S. at 331-332.  The Court concluded, in other words, that the
assertion of a constitutional right to a hearing before benefits were
terminated would be effectively unreviewable (and any resulting
constitutionally-based injury would be effictively irremediable) on
judicial review of the Secretary's final decision on the merits of the
claim for benefits, which would occur only after benefits had been
terminated.  Compare Coopers & Lybrand v. Livesay, 437 U.S. 463, 468
(1978).  See also Ringer, slip op. 14-15.

   This exception plainly has no application here.  As the court of
appeals acknowledged (App., infra, 14a), the legal issues respondents
raise concerning the interpretation of regulations affecting the
assessment of RFC are not "entirely" or "wholly" collateral to their
substantive claims for benefits, as Ringer and Eldridge require.  To
the contrary, those regulations give content to the statutory
definition of "disability" and therefore relate directly to the class
members' substantive entitlement to benefits.  Moreover, the alleged
failure by the state agency to make an individualized assessment of a
particular class member's RFC would be fully reviewable on judicial
review of the Secretary's final decision denying benefits (assuming
that the ALJ and Appeals Council likewise failed to make such an
assessment):  the court could reverse that decision and remand with
instructions to make an appropriate assessment of RFC and to award
retroactive benefits if the claimant were found to be disabled.

   The court of appeals believed that Eldridge supported its holding
because class members might suffer a "severe medical setback" if they
had to pursue administrative remedies and thus, like the plaintiff in
Eldridge, they had made a "colorable claim" that retroactive benefits
would not fully compensate them (App., infra, 12a-14a).  The court
misunderstood the holding in Eldridge.  This Court did not hold that
any disability claimant could bypass the carefully structured
administrative appeals process merely by making a "colorable" showing
to a court that he might suffer hardship by virtue of an interlocutory
denial of his claim on the merits.  The Court was referring to the
distinct injury of constitutional dimension that would have resulted
if Eldridge's benefits were terminated without the prior hearing that
he alleged was required by the Due Process Clause;  the Court simply
observed, citing Goldberg, v. Kelly, supra, that Eldridge had made a
"colorable" claim of such a distinct injury, tied directly to his
collateral constitutional assertion, that would not be remedied by a
reversal on the merits and a retroactive award of benefits.

   By contrast, the very premise of the multi-level administrative
review process established by Congress and the Secretary is that if an
individual's claim is erroneously denied on the merits at an early
stage of the administrative process, a reversal at a later stage or on
judicial review and the resulting award of the accrued benefits to
which he is entitled is an adequate remedy for any statutory error.
Ringer, slip op. 14-15.  "Congress must have felt that cases of
individual hardship resulting from delays in the administrative
process had to be balanced against the potential for overly casual or
premature judicial intervention in an administrative system that
processes literally millions of claims every year.  If the balance is
to be struck anew, the decision must come from Congress," not the
courts.  Id. at 23-24 (footnote omitted).  Moreover, where Congress
has believed that claimants might experience hardship by virtue of the
exhaustion requirement, it has addressed that problem directly by
providing for the continuation of benefits until after the ALJ
hearing. See pages 5-6, supra.  Congress has not dispensed with the
exhaustion requirement itself, as the court of appeals did in this
case.

   d. For the foregoing reasons, there is no support whatever in the
"final decision" language of 42 U.S.C. 405(g), in implementing
regulations, or in this Court's decisions for the court of appeals'
holding that it may dispense with the exhaustion requirement based on
its own balancing of such factors as whether exhaustion regarding a
particular legal issue would be "futile";  whether the legal issue can
be characterized as "procedural" or "substantially" collateral;  and
whether a "colorable" showing has been made that the claimant (or some
unspecified number of the members of a class of claimants) might not
be fully compensated by a retroactive award of benefits.  This largely
standardless approach would sacrifice the certainty and ease of
application that are critical to the efficient administration of the
Social Security Act and to the ability of the lower federal courts to
dispose promptly of thousands of individual Social Security cases and
numerous class actions annually without extensive and wasteful
litigation on threshold questions of jurisdiction.

   The court of appeals' exhaustion analysis in this case was recently
followed by the Eighth Circuit in Polaski v. Heckler, 751 F.2d 943,
951-955 (1984).  See also Reed v. Heckler, 756 F.2d 779 (10th Cir.
1985).  However, Polaski and the instant case squarely conflict on the
exhaustion issue with Hyatt v. Heckler, 757 F.2d 1455, 1460 (1985), in
which the Fourth Circuit held that a court could excuse exhaustion
only where the legal issue involved is "wholly collateral" to the
claim for benefits.  That conflict -- on a broadly recurring issue
raised in what HHS informs us are approximately 60 pending class
actions arising under the Social Security disability programs --
plainly warrants resolution by this Court.

   2. a. The district court, affirmed by the court of appeals, also
included in the class any individual who received an adverse
determination by the New York state agency on or after April 1, 1980,
almost three years before this suit was filed in February 1983 (App.,
infra, 65a).  This aspect of the class certification is inconsistent
with the requirement in 42 U.S.C. 405(g) that judicial review of the
Secretary's "final decision" on an individual's claim for benefits
must be sought "within sixty days after the mailing to him of notice
of such decision or within such further time as the Secretary may
allow."

   The Secretary has promulgated regulations establishing a procedure
for the exercise of her authority under 42 U.S.C. 405(g) to extend the
60-day filing period.  Under those regulations, the claimant must file
a written request with SSA explaining why he did not seek judicial
review within 60 days.  SSA then will extend the filing time if it
determines that the claimant has established "good cause" for missing
the deadline.  20 C.F.R. 404.982, 404.911, 416.1482, 416.1411.  There
is no indication that any of the class members who received a final
decision of the Secretary more than 60 days before this suit was filed
ever submitted a request to the Secretary under these provisions.
Those class members therefore remain timebarred, and they were not
properly included in the class.

   b. The court of appeals concluded, however, that a court may extend
the 60-day filing period even where the Secretary has not done so, and
that in this case the running of that period should be "effectively
tolled" on a state-wide basis during the time that the challenged
"presumption" concerning RFC was operative but undisclosed (App.,
infra, 17a-18a).  This holding is plainly wrong.

   "(T)he United States, as sovereign, 'is immune from suit save as it
consents to be sued . . . and the terms of its consent to be sued in
any court define that court's jurisdiction to entertain the suit.'"
Lehman v. Nakshian, 453 U.S. 156, 160 (1981), quoting United States v.
Testan, 424 U.S. 392, 399 (1976), and United States v. Sherwood, 312
U.S. 584, 586 (1941). Consistent with these principles, the Court held
in Salfi that the "final decision" requirement in 42 U.S.C. 405(g) is
a "statutorily specified jurisdictional prerequisite" to suit.  422
U.S. at 766.  See also Ringer, slip op. 14.  The requirement in 42
U.S.C. 405(g) that an action for judicial review be commenced within
60 days of "such decision" (or within such further time as the
Secretary may allow) appears in the same sentence as the final
decision requirement, and it likewise is a "statutorily specified
jurisdictional prerequisite" to suit.  Hunt v. Schweiker, 685 F.2d
121, 123 (4th Cir. 1982).  A court has no authority to entertain an
action by (or on behalf of) any individual who has not satisfied that
prerequisite.  Heckler v. Lopez, No. A-145 (Oct. 11, 1983), slip op. 3
(Stevens, J., dissenting in part).  As Justice Stevens has explained
(ibid.):

      These persons' right to seek administrative or judicial review
      of their * * * decisions had expired, and they could obtain
      benefits only by requesting that the Secretary reopen their
      cases.  However, the District Court had no jurisdiction to
      review the Secretary's refusal to reopen the cases.  Califano v.
      Sanders, 430 U.S. 99 (1977).

Compare Munro v. United States, 303 U.S. 36, 41 (1983);  Finn v.
United States, 123 U.S. 227, 232-233 (1887).  /10/

   The court of appeals' holding also is wrong even if the 60-day
filing requirement is not regarded as jurisdictional in the strictest
sense.  However they may be characterized, statutorily mandated limits
on the time within which a suit may be brought against the federal
government must be strictly construed, and the courts are not
authorized to fashion their own tolling rules or to extend those time
limits beyond what Congress has permitted. Soriano v. United States,
352 U.S. 270, 275-276 (1957);  United States v. Kubrick, 444 U.S. 111,
117-118 (1979).  Cf. United States v. Boyle, No. 83-1266 (Jan. 9,
1985), slip op. 7-8. In this case, the fact that Congress expressly
vested authority in the Secretary to extend the 60-day filing period
under 42 U.S.C. 405(g) in appropriate circumstances, but conferred no
such authority on the courts, strongly reinforces the conclusion that
the courts have no authority to excuse noncompliance with the 60-day
requirement under duplicative, judicially fashioned tolling rules.
Cf. United States v. Locke, No. 83-1394 (Apr. 1, 1985), slip op. 9
n.10.

   c. The particular way in which the court of appeals sought to avoid
application of the 60-day rule in this case is especially
objectionable, even if a court in some circumstances could excuse a
claimant from complying with that requirement.  The court believed
that the running of the 60-day period should be tolled while what it
labeled the secretive" presumption regarding RFC was in effect but
undisclosed (App., infra, 18a).  The apparent premise of this holding
-- that there was some sort of sinsiter practices involved -- is
mistaken.  There is no indication that the memoranda upon which the
district court relied (id. at 41a) were anything other than ordinary
communications in the normal course of agency business concerning an
issue on which the personnel involved were attempting in good faith to
develop and articulate a policy.  Nothing about them indicates they
were intended to be "secretive." To the contrary, an agency of the
State of New York, one of the plaintiffs in this case, made the RFC
determinations at the initial determination and reconsideration
stages, and it concededly had full knowledge of the interpretation
reflected in those memoranda.  However erroneous that interpretation
may appear in hindsight, the documents purported to interpret and
apply the governing regulations and implementing forms and
instructions, not to establish a secret regime in deliberate
contravention of those materials.  Similarly, SSA quality reviews of
state agency decisions, upon which the district court also relied (id.
at 34a-36a, 39a-40a), are a regular part of SSA's responsibility that
have been mandated by Congress, and the state agency of course was
fully aware of that practice as well.  See page 4, supra.

   The court of appeals' analysis was also seriously flawed as a legal
matter.  The court relied on a parallel it drew to when a cause of
action "accrues" under the two-year limitations provision in the
federal Tort Claims Act (28 U.S.C. 2401(b).  See App., infra, 18a,
citing Barrett v. United States, 689 F.2d 324, 327-330 (2d Cir. 1982)
(a FTCA case).  But contrary to the court's belief, FTCA principles do
not support its holding.  This Court held in United States v. Kubrick,
444 U.S. 111 (1979), that a claim "accrues" under the FTCA when the
plaintiff has discovered both his injury and its probable cause.
Here, when each class member received notice of an administrative
decision denying his claim, he clearly knew of his "injury" (the
denial of statutory benefits), its "cause" (the adverse decision), and
who caused it (the Secretary, acting through SSA or the state agency).
 Under FTCA principles, the 60-day period would clearly begin to run
at that point even if the claimant did not also know that SSA had
given an erroneous interpretation of the regulations to state agency
officials.  Kubrick, 444 U.S. at 121-122.

   The more fundamental response to the court of appeals' reasoning,
however, is that this case does not arise under the FTCA and does not
require a court to ascertain when a cause of action "accrues" for
purposes of that Act.  In 42 U.S.C. 405(g), Congress specified when a
cause of action accrues:  when notice of the "final decision" of the
Secretary is mailed to the claimant.  Congress further specified that
judicial review must be sought within 60 days of that date unless the
Secretary extends the time, and indeed the notice of "final decision"
informs the claimant of his right to seek judicial review within 60
days. Compare Atkins v. Parker, No. 83-1660 (June 4, 1985), slip op.
12, 15.  The court below was not free to refashion the statutory
scheme by designating different operative dates

   The court of appeals' approach also would present enormous
practical difficulties.  It apparently would have the effect of
tolling the running of the 60-day period, on a statewide or even
nationwide basis, whenever an administrative decision adverse to a
claimant was based on an erroneous interpretation of the statute or
regulations that was contained in internal operating instructions.
Such implementing instructions, which are not required to be published
in the Federal Register, are commonplace in the administration of the
Social Security Act.  To dispense with the filing requirement on the
basis the court suggested therefore would broadly unsettle the repose
that Congress intended to result from the 60-day rule.

   d. The court of appeals also held that even if the district court
did not have jurisdiction under 42 U.S.C. 405(g) to review the "final
decisions" of class members that were rendered more than 60 days
before this suit was filed, it could review those same decisions under
the mandamus statute, 28 U.S.C. 1361 (App., infra, 19a-20a).  The
court conceded (id. at 20a-21a n.7) that under this Court's decision
in Ringer, slip op. 12-13, the exhaustion requirement embodied in the
"final decision" language of 42 U.S.C. 405(g) could not be
circumvented by resort to mandamus jurisdiction.  It necessarily
follows that the 60-day filing period cannot be avoided in that manner
either.

   The second sentence of 42 U.S.C. 405(h) provides that "(n)o
findings of fact or decision of the Secretary shall be reviewed by any
* * * tribunal * * * except as herein provided' -- i.e., except as
provided in 42 U.S.C. 405(g), subject to that section's 60-day time
limit.  Section 405(h) thus forecloses the very circumvention of the
60-day rule that the court of appeals has allowed.  In any event,
mandamus is not available where there is another adequate remedy or
where the defendant does not owe the plaintiff a clear
nondiscretionary duty.  Ringer, slip op. 13.  Here, the class members
involved had a fully adequate remedy under 42 U.S.C. 405(g);  they
simply failed to invoke it in a timely fashion. Ringer, slip op. 13.
Furthermore, the Secretary's determination whether a particular
individual has the RFC to do unskilled work is itself a discretionary
decision (ibid.) and, in addition, the Secretary clearly has no
mandatory duty to reopen the binding administrative decisions of
time-barred class members in order to reevaluate each member's RFC.
Califano v. Sanders, supra.

   e. In contrast to the Second Circuit in this case, the Fourth and
Sixth Circuits have held that the 60-day filing period in 42 U.S.C.
405(g) is jurisdictional.  See Hyatt v. Heckler, 757 F.2d 1460-1461;
Hunt v. Schweiker, supra;  Biron v. Harris, 668 F.2d 259, 261 (6th
Cir. 1982);  Whipp v. Weinberger, 505 F.2d 800, 801 (6th Cir. 1964).
Other courts of appeals, however, have reached a contrary conclusion.
See Mental Health Ass'n V. Heckler, 720 F.2d at 973 n.19;  Hatchell v.
Heckler, 708 F.2d 578, 580 n.1 (11th Cir. 1983).  The court of appeals
in this case acknowledged that there is a circuit conflict on this
issue (App., infra, 17a) and that this Court's "position on whether
the 60-day provision is jurisdictional is not free from doubt" (id. at
16a).  This conflict warrants resolution by this Court, especially in
view of its broad practical ramifications)

   3. The court of appeals also ignored the fact that Congress has
specifically addressed the very questions respondents have raised in
this suit and has fashioned its own remedial measures for persons who
may have been erroneously denied benefits under prior standards
pertaining to evaluation of mental impairments. Congress directed the
Secretary in Section 5(a) of the Social Security Disability Benefits
Reform Act of 1984 to develop new standards for evaluating mentally
impaired claimants.  98 Stat. 1801;  App., infra, 73a-75a.  Proposed
standards have been issued (50 Fed.Reg. 4948 (1985)), and we have been
informed by HHS that final regulations may be promulgated in June
1985. Congress provided that any person who claimed a disability based
on mental impairment and was found not to be disabled on or after
March 1, 1981 could reapply and be reevaluated under these new
standards.  Section 5(c)(3), 98 Stat. 1802.  The court of appeals, by
contrast, required reopening of cases back to April 1, 1980.
Moreover, unlike the court of appeals, Congress did not provide that
the Secretary must reopen all past decisions, whether or not the
claimant so requests.  Nor did Congress provide that any claimant who
reapplied and was found disabled would be entitled to full retroactive
benefits, as the court of appeals ordered.  Under the special
reopening provision of the 1984 Act, persons who are found on
reapplication to be disabled are entitled to benefits only for the 12
months prior to the date of their new applications.  Finally, Congress
did not waive the exhaustion and 60-day requirements for persons who
are members of class actions raising mental impairment issues in
court, as it did under Section 2 of the 1984 Act (98 Stat. 1794) with
regard to cases relating to the medical improvement issue.  See
Heckler v. Lopez, No. 84-115 (Dec. 10, 1984);  Heckler v. Kuehner, No.
83-1593 (Nov. 5, 1984)

   Thus, the decision of the court of appeals fails to respect the
judgment of Congress not only with regard to the exhaustion and 60-day
requirements in 42 U.S.C. 405(g), but also with regard to the
determinations in the 1984 Act to adhere to those requirements and to
provide more limited relief for persons claiming benefits on the basis
of a mental impairment.

                              CONCLUSION

   The petition for a writ of certiorari should be granted.

   Respectfully submitted.

   CHARLES FRIED

      Acting Solicitor General

   RICHARD K. WILLARD

      Acting Assistant Attorney General

   KENNETH S. GELLER

      Deputy Solicitor General

   EDWIN S. KNEEDLER

      Assistant to the Solicitor General

   WILLIAM KANTER

   HOWARD S. SCHER

      Atorneys

   JUNE 1985

   /1/ The Secretary has not provided for a separate reconsideration
stage in disability cessation cases under Title XVI.  A SSI recipient
therefore is entitled to an administrative law judge hearing after
receiving notice of an initial determination that his entitlement has
ceased.  20 C.F.R. 416.1407, 416.1415.

   /2/ Subsequently, on June 7, 1983, the Secretary announced a
moratorium, pending consultation with experts and development of new
standards and procedures, in the continuing disability review of
persons receiving benefits on the basis of a mental disability that is
a functional psychotic disorder.  S. Rep. 98-446, supra, at 19.

   /3/ The district court stated that an administrative "change" was
precipitated by the filing of the instant suit as well as the decision
in Minnesota Mental Health (App., infra, 39a).  As noted in the text,
however, the Commissioner had sent corrective instructions to the
Regional Commissioners and state agencies even before this suit was
filed.  Moreover, the Commissioner's memorandum of January 3, 1983 did
not state that SSA's official policy had changed.  To the contrary, in
another memorandum dated January 3, 1983 to the appropriate SSA
regional office, the Commissioner stated that the approach suggested
in the regional office memoranda to the state agencies that were at
issue in Minnesota Mental Health was inconsistent with the
requirements of the sequential evaluation process established by the
regulations and implementing POMS instructions (DX L).

   /4/ The district court also ordered the payment of interim
benefits, pending reopening and redetermination, to class members who
previously were found to be disabled but whose benefits were
terminated (App., infra, 66a).  The district court granted a stay of
its judgment pending a decision by the court of appeals, except for
those portions of the judgment that required the Secretary to identify
all members of the class, to pay interim benefits on a prospective
basis to class members who were terminated pursuant to the Continuing
Disability Investigation review program, and to implement the judgment
for all class members who then had appeals pending before an ALJ or
the Appeals Council or who received a final decision after a hearing
on or after this action was filed on February 8, 1983 (id. at
67a-68a).  The court of appeals denied the Secretary's motion for a
stay of those portions of the judgment (id. at 8a).

   /5/ 5 Fed.Reg. 4169, 4171-4174 (1940), adopting 20 C.F.R.
403.706(c), 403.708(g), 403.709(l), 403.710(e) (1941).  See S. Doc.
10, 77th Cong., 1st Sess. Pt. 3, at 38-39, 51-53 (1941).

   /6/ See 20 C.F.R. 403.706(c), 403.708(b), 403.708(g), 403.709(b),
403.709(l), 403.710(b), 403.710(e) (1954 & 1956);  20 C.F.R. 404.908,
404.911, 404.916, 404.918, 404.940, 404.946, 404.951 (1972).

   /7/ This single exception to the exhaustion requirement is
discussed in our jurisdictional statement (at 6-7, 19-21) in Heckler
v. Owens, No. 84-1905, which presents the question of the
constitutionality of a provision of the Social Security Act and in
which the named plaintiffs pursued the expedited appeal process.

   /8/ A third plaintiff who had failed to pursue his administrative
remedies beyond the reconsideration stage on his first application for
benefits was found to be disabled after he filed a second application
(C.A. App. 64 (Richard Roe III)).

   /9/ Moreover, these latter three claimants and Jane Doe I all had
personally exhausted their administrative remedies through the Appeals
Council stage and filed an individual action for judicial review under
42 U.S.C. 405(g) by the time the district court ruled in this case
(C.A. App. 60, 62, 63, 66).  The remaining named plaintiff was found
by the ALJ to have an impairment that met the listings but was denied
benefits under the nondisability provision of the Act (C.A. App. 62
(Richard Roe I)) -- i.e., for reasons unrelated to the alleged
presumption concerning RFC.  And although this plaintiff later
reapplied for benefits, he failed to pursue his administrative
remedies past the reconsideration stage (ibid.).

   /10/ In Salfi and Eldridge, the Court described the 60-day filing
period as a "statute of limitations" that was waived by the Secretary
because it was not timely raised below.  422 U.S. at 764;  424 U.S. at
328 n.9.  However, as we explain in our jurisdictional statement (at
24 n.11) in Heckler v. Owens, supra, those statements were dicta,
since the 60-day issue was not raised in either case and the claimant
in each sought judicial review within 60 days of the relevant
administrative decision.  By contrast, this Court's decisions in Munro
and Finn, cited in the text, indicate that such a time limit on filing
suit against the government is not subject to waiver rules applicable
to ordinary statutes of limitations.  In any event, in her answer in
this case, the Secretary contended that the district court lacked
jurisdiction over the subject matter (C.A. App. 53), which in the
present context connotes a failure to comply with the requirements of
42 U.S.C. 405(g).  Moreover, the 60-day issue was fully developed in
the district court.  Thus, contrary to the district court's apparent
suggestion (App., infra, 59a), the Secretary cannot fairly be said to
have "waived" any objection to that fundamental defect.

   APPENDIX