MARGARET M. HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, ET
AL., PETITIONERS V. FRANK KUEHNER, ET AL.

   No. 83-1593

   In the Supreme Court of the United States

   October Term, 1984

   On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Third Circuit

   Supplemental Brief for the Petitioners

            TABLE OF CONTENTS
   Conclusion
   Appendix

   Pursuant to Rule 22.6 of the Rules of this Court, the Solicitor
General, on behalf of the Secretary of Health and Human Services and
the other petitioners, files this supplemental brief to discuss the
effect on this case of the Social Security Disability Benefits Reform
Act of 1984, Pub. L. 98-460, 98 Stat. 1794 et seq., which was signed
by the President on October 9, 1984.  We have lodged a copy of that
Act with the Clerk of the Court and reproduced Section 2 of the Act as
an appendix to this brief.  As we shall explain below, the 1984 Act
requires that the claims of all of the class members be remanded to
the Secretary for new administrative proceedings and that the
complaint in this action be dismissed.

                                   A

   Respondents allege that certain practices of the Secretary and the
Pennsylvania Disability Determination Bureau in reviewing the
continuing eligibility of persons receiving disability benefits under
Title II and Title XVI of the Social Security Act, violate that Act
and the Due Process Clause.  Specifically, they allege that
petitioners:  (1) fail to show, as a condition to terminating
benefits, that the claimant's medical condition has improved;  (2)
fail to give presumptive effect to the prior determination of
disability;  (3) terminate benefits in the absence of fully developed
evidence from all treating personnel and without giving appropriate
weight to such evidence;  and (4) terminate benefits without
sufficiently considering such factors as medical equivalence,
combination of impairments, pain, and residual functional capacity
(C.A. App. 25-27;  Pet. App. 39a-40a).  The district court certified a
class of plaintiffs consisting of all disability beneficiaries under
Title II and Title XVI of the Act in Pennsylvania "whose benefits have
been terminated or are threatened with termination and who have
presented claims for continued" disability (C.A. App. 40).

   The district court dismissed the complaint for lack of subject
matter jurisdiction under 42 U.S.C. (Supp. V) 405(g) (Pet. App.
39a-45a), but the court of appeals reversed and remanded for further
proceedings (Pet. App. 1a-34a).  The court of appeals held that
respondents were not required to exhaust their administrative remedies
before bringing an action under 42 U.S.C. (Supp. V) 405(g) with regard
to issues on which the Secretary had allegedly taken a "fixed"
position (Pet. App. 7a-11a), and that jurisdiction also was available
over the federal defendants under 28 U.S.C. 1361 and over the state
defendants under 28 U.S.C. 1331, notwithstanding the preclusion of
review in 42 U.S.C. 405(h) (Pet. App. 12a-13a, 5a-7a).

   As we explained in our reply brief (at 3-7), the court of appeals'
decision is flatly inconsistent with this Court's decision in Heckler
v. Ringer, No. 82-1772 (May 14, 1984), and with the Court's prior
precedents that were reaffirmed in that decision.  We therefore
submitted in the reply brief (at 7) that the case should be remanded
to the court of appeals for further consideration in light of Ringer.
Congress's recent action, however, now requires a different
disposition.

                                   B

   The Social Security Disability Benefits Reform Act of 1984
specifically addresses most of the substantive issues respondents
raised in district court, and it also directs a particular disposition
of this case as a procedural matter.

   1. a. One of the principal purposes of the new legislation is to
resolve the controversy over the so-called "medical improvement issue.
 That issue has generated wide-spread litigation, often in the form of
massive class actions, that has substantially disrupted the orderly
administration of the Social Security disability program.

   The "medical improvement" issue concerns the evidentiary standards
that the Secretary must utilize in determining whether a person
receiving disability benefits continues to be disabled.  Prior to the
passage of the 1984 amendments, the Social Security Act itself did not
address that question, /1/ although it was settled that the claimant
bore the burden of proving by medical evidence that he met the
statutory standard of eligibility when his status was reviewed.  See
Mathews v. Eldridge, 424 U.S. 319, 336 (1976).  Pursuant to her
authority under 42 U.S.C. 405(a) to promulgate evidentiary and other
rules and procedures (see Heckler v. Campbell, No. 81-1983 (May 16,
1983), slip op. 7-8), the Secretary determined that the inquiry when
reviewing a recipient's continuing eligibility should focus on whether
his current condition satisfied applicable standards, rather than on
whether his condition had changed.  It was not the Secretary's
position, however, that the prior finding of disability was
irrelevant, because it might well shed light on the claimant's current
condition.

   Many claimants challenged the Secretary's approach.  Like
respondents in this case, they typically argued that under the Social
Security Act even as it existed prior to the 1984 amendments, if an
individual was once found to be disabled he was entitled to a
presumption that he continued to be disabled when his eligibility was
subject to review, thereby effectively shifting the burden to the
Secretary in all disability review cases to produce evidence that the
individual was no longer disabled.  The courts of appeals had taken
varying approaches to the issue, /2/ and the Solicitor General was
considering a request that this Court resolve the matter.

   b. In Section 2 of the 1984 Act, Pub. L. No. 98-460, 98 Stat. 1794,
Congress amended Sections 223(f) and 1614(a) of the Social Security
Act (42 U.S.C. (Supp. V) 423(f);  42 U.S.C. (& Supp. V) 1382c) to
prescribe detailed standards for the termination of disability
benefits.  Under the amendments, a recipient of disability benefits
whose case is reviewed may be determined not to be entitled to
benefits on the basis of a finding that his impairment is not
disabling only if that finding is supported by:  (1) substantial
evidence that there has been medical improvement in the individual's
impairment and that he is now able to engage in substantial gainful
activity;  (2) new medical evidence and a new assessment of the
individual's residual functional capacity demonstrating that, although
his condition has not improved medically, he has undergone vocational
therapy or is the beneficiary of advances in medical or vocational
therapy or technology and is now able to engage in substantial gainful
activity;  (3) substantial evidence based on new or improved
diagnostic techniques demonstrating that the individual's impairment
is not as disabling as it previously was considered to be and that he
is now able to engage in substantial gainful activity;  or (4)
substantial evidence that the prior determination of disability was in
error.  /3/ The amendments to Sections 223(f) and 1614(a) expressly
provide, however, that there is no presumption of continuing
disability and that the determination whether the person is currently
disabled is to be made on a neutral basis after considering all
evidence available in the file.

   2. Congress also concluded when it passed the 1984 Act that it was
essential to the effective, uniform, and fair administration of the
disability program that the widespread and disruptive litigation over
the appropriate standards for terminating benefits should cease
immediately and that all pending cases should instead be considered
under the new statutory standards.  To implement this determination,
Congress specified in detail the manner in which the new statutory
standards would be applied to pending cases.  There are essentially
three categories of cases affected:

   Cases Pending on Administrative Review.  The new medical
improvement standards apply to (i) all cessation determinations made
by the Secretary on or after the date of enactment of the 1984
amendments, and (ii) all cessation determinations with respect to
which a final decision of the Secretary had not been made on the date
of enactment but with respect to which a request for administrative
review is made in conformity with the time limits, exhaustion
requirements, and other provisions of 42 U.S.C. (& Supp. V) 405 and
regulations of the Secretary.  Sec. 2(d)(2)(A) and (B), 98 Stat. 1797.

   Individual Cases Pending on Judicial Review.  The new standards
apply to all cessation determinations with respect to which a request
for judicial review was pending on September 19, 1984 (the date of the
Conference Committee's action) and which involve individual litigants
or named plaintiffs in a class action pending on that date.  Sec.
2(d)(2)(C) 98 Stat. 1797.  /4/ Any cases in this category that are
ones "relating to medical improvement" /5/ must be remanded by the
court to the Secretary for review under the new standards.  Sec.
2(d)(2), 98 Stat. 1798 (final paragraph).  The individual may request
payment of interim benefits until the initial redetermination by the
Secretary.  Sec. 2(e), 98 Stat. 1798.

   Class Actions.  The new standards apply to any unnamed member of a
pending class action "relating to medical improvement" (see note 5,
supra) if the class was certified on or before September 19, 1984, and
if the individual class member was found not to be entitled to
disability benefits on the ground that his impairment had ceased, did
not exist, or was not disabling.  Sec. 2(d)(3), 98 Stat. 1798.  /6/ In
the case of any such individual, "the court shall remand such case to
the Secretary." Ibid.  The Secretary is then required to notify each
individual by certified mail that, within 120 days of receipt of the
notice, he may request that his case be reviewed under the new
standards.  The individual also may request payment of interim
benefits pending the initial redetermination.  Sec. 2(e), 98 Stat.
1798.

   Section 2(d)(3), 98 Stat. 1798, permits unnamed class members in
pending certified class actions relating to medical improvement an
opportunity to have their cases reviewed under the new statutory
standards whether or not they had exhausted their administrative
remedies or satisfied the 60-day filing requirement in 42 U.S.C.
(Supp. V) 405(g).  Congress chose to grant this special relief to
members of certified classes "even where they may not have pursued
their appeal rights in accordance with section 205 and the Secretary's
regulations" because of the need to "resolve the controversy over the
medical improvement issue in the courts" and because many class
members "may have formed reasonable expectations from the fact of
certification that they would receive further review of the case." 130
Cong. Rec. S11454 (daily ed. Sept. 19, 1984) (remarks of Sen. Dole).
/7/ See also id. at H9828 (Joint Explanatory Statement of the
Committee of Conference).  But Congress did not thereby sanction a
general exception to the exhaustion and time-limit requirements in 42
U.S.C. (Supp. V) 405(g).  /8/

                                   C

   The names and unnamed members of the class in this case are
entitled to relief under the 1984 Act.  This case is one "relating to
medical improvement" within the meaning of Section 2(d) of the 1984
Act, since the first two of the four issues respondents raise in the
complaint pertain directly to the medical improvement question (C.A.
App. 25-26).  See page 2, supra.  /9/ The cases of the individual
named respondents therefore should be remanded to the Secretary to be
reviewed pursuant to Section 2(d)(2)(C) of the 1984 Act.  In addition,
the class in this case was certified on May 4, 1982 (C.A. App. 40),
well before the September 19, 1984 cut-off date for members of
certified classes to be covered by the standards in the 1984 Act.  The
cases of the unnamed class members therefore should be remanded to the
Secretary for further proceedings pursuant to Section 2(d)(3) of the
1984 Act.  /10/

   The 1984 Act contemplates no further role for any court after an
individual case or the case of an unnamed member of a certified class
has been remanded to the Secretary.  This conclusion is evident from a
number of features of the special procedures Congress has prescribed
in Section 2(d) of the 1984 Act.

   The individual cases of named class members must be remanded by the
appropriate court to the Secretary, who then will proceed after remand
to review them pursuant to the new statutory standards.  The court has
no discretion in the matter.  The same is true with regard to cases of
the unnamed class members.  It is also significant that it is the
individual cases that are to be remanded, not the class as such, and
it is only after remand that the Secretary is to notify each
individual of his right to request a new administrative review.  This
notification and review in turn will be undertaken pursuant to uniform
procedures that the Secretary will apply to all such individual
claims.  Moreover, Section 2(d)(4) of the 1984 Act expressly provides
that the decision of the Secretary following review "shall be regarded
as a new decision * * * of the Secretary." That new decision
"supersedes" the prior determination that was pending on judicial
review and is "subject to further administrative review and to
judicial review only in conformity with the time limits, exhaustion
requirements, and other provisions of section 205 of the Social
Security Act and regulations issued by the Secretary in conformity
with such section." Section 2(d)(4), 98 Stat. 1798.

   Because the 1984 Act plainly contemplates that new proceedings will
be commenced in each individual case after remand, the individual
cases cannot at the same time be subject to the continuing
jurisdiction of the court in the class action.  Any such continuing
exercise of authority by the courts would be inconsistent with the
clear intent of Congress to end the disruption and lack uniformity in
the administration of the Social Security disability program that had
resulted from class actions in various jurisdictions on the medical
improvement issue.  Compare Heckler v. Day, No. 82-1371 (May 22,
1984), slip op. 12.  Accordingly, the complaint in the instant case
should be dismissed when the claims of the individual class members
are remanded to the Secretary.

                              CONCLUSION

   For the foregoing reasons, we suggest that the Court enter the
following order in this case:

         The petition for a writ of certiorari is granted, the
      judgment of the court of appeals is vacated, and the case is
      remanded to the court of appeals to be remanded to the district
      court with instructions to:  (i) remand the cases of the named
      respondents to the Secretary for review pursuant to Section
      2(d)(2)(C) of the Social Security Disability Benefits Reform Act
      of 1984;  (ii) remand the cases of the unnamed class members to
      the Secretary for proceedings pursuant to Section 2(d)(3) of
      that Act;  and (iii) dismiss the complaint.

   Respectfully submittted.

   REX E. LEE

      Solicitor General

   OCTOBER 1984

   /1/ The legislative history of the 1984 Act shows that Congress
recognized that the Social Security Act previously did not impose
special standards for continuing disability reviews.  See, e.g., H.R.
Rep. 98-618, 98th Cong., 2d Sess. 11 (1984) ("the criteria for
termination of benefits as a result of review were left unstated in
the law" and "SSA has therefore had wide discretion to apply whatever
standards it deemed appropriate");  S. Rep. 98-466, 98th Cong., 2d
Sess. 7-8 (1984);  130 Cong. Rec. H9827 (daily ed. Sept. 19, 1984)
(Joint Explanatory Statement of the Committee of Conference);  id. at
S11453 (remarks of Sen. Dole).

   /2/ Some courts had held that the claimant should be afforded a
presumption of continuing disability.  See, e.g., Patti v. Schweiker,
669 F.2d 582, 586-587 (9th Cir. 1982);  Dotson v. Schweiker, 719 F.2d
80, 82 (4th Cir. 1983);  Haynes v. Secretary of HHS, 734 F.2d 284, 288
(6th Cir. 1984);  DeLeon v. Secretary of HHS, 734 F.2d 930, 936-937
(2d Cir. 1984);  Rush v. Secretary of HHS, 738 F.2d 909, 914-916 (8th
Cir. 1984).  But see Gist v. Secretary of HHS, 736 F.2d 352, 355-357
(6th Cir. 1984).  The Third Circuit had rejected such a presumption
and held that the claimant bore the initial burden of establishing
that there had not been improvement in his medical condition.  See
Kuzmin v. Schweiker, 714 F.2d 1233, 1237 (3d Cir. 1983).

   /3/ The amendments to Sections 223(f) and 1614(a) also provide that
benefits may be terminated if the prior determination that the
individual was disabled was fraudulently obtained or if the individual
is engaged in substantial gainful activity, cannot be located, fails
to cooperate in the review of his entitlement, or fails to follow a
prescribed treatment that could be expected to restore his ability to
engage in substantial gainful activity.

   /4/ The new standards also apply in cases in which the Secretary
had rendered a final decision within the 90-day period prior to the
date of enactment but the claimant had not yet sought judicial review
under 42 U.S.C. (Supp. V) 405(g), but only if the claimant seeks
judicial review in a timely fashion (i.e., within 60 days of the final
decision) after the date of enactment.  Section 2(d)(2)(D), 98 Stat.
1797.

   /5/ The term "action relating to medical improvement" is defined to
mean a suit raising the issue whether an individual should not have
had his entitlement to disability benefits terminated "without
consideration of whether there has been medical improvement in the
condition of such individual * * * since the time of a prior
determination that the individual was under a disability.  Section
2(d)(6), 98 Stat. 1798.

   /6/ Section 2(d)(5) of the 1984 Act, 98 Stat. 1798, provides that
no class in a class action relating to medical improvement may be
certified after September 19, 1984 if the class action seeks judicial
review of a decision terminating entitlement made by the Secretary
prior to September 19, 1984.  This prevents any future class action
litigation on the medical improvement issue under prior law.  See 130
Cong.Rec. S11454 (daily ed. Sept. 19, 1984) (remarks of Sen. Dole);
S. Rep. 98-466, 98th Cong., 2d Sess. 16-17 (1984).

   /7/ Under the Senate bill, the only unnamed class members whose
claims would have been preserved and remanded to the Secretary were
those who had fully exhausted their administrative remedies and for
whom judicial review was sought (in the form of the class action)
within 60 days of the Secretary's final decision, as required by 42
U.S.C. 405(g).  See 130 Cong.Rec. S6202-S6203 (daily ed. May 22,
1984).  The Senate Report explained that insofar as the bill would
have barred reopening of claims where the claimant had not sought
further administrative review or judicial review within 60 days, it
merely restated existing law that "precludes judicial review of
administrative denials of claims that the claimants themselves allowed
to become final." S. Rep. 98-466, supra, at 14, citing Califano v.
Sanders, 430 U.S. 99 (1977);  see also S. Rep. 98-466, supra, at 15.
Similarly, relying upon 42 U.S.C. 405(g), the Secretary's regulations,
and this Court's decisions in Weinberger v. Salfi, 422 U.S. 729
(1975), and Heckler v. Ringer, No. 82-1772 (May 14, 1984), the report
explained that under existing law, a claimant could obtain judicial
review on a claim for benefits that involved the medical improvement
issue only if he first exhausted his administrative remedies through
the Appeals Council stage.  S. Rep. 98-466, supra, at 15.

   The effective date provision of the House bill did not address the
effect of the bill on members of certified classes in pending class
actions.  See 130 Cong.Rec. H1992 (daily ed. Mar. 27, 1984).  The
Conference Committee revised the bill to grant relief to all members
of certified classes.

   /8/ The Joint Explanatory Statement cautioned that the granting of
remand relief to all members of certified classes does not reflect a
view "as to whether those classes would otherwise have been found to
be properly certified in accordance with the exhaustion and finality
requirements of section 205 of the Social Security Act." 130 Cong.
Rec. H9828 (daily ed. Sept. 19, 1984).  Chairman Dole, the floor
manager in the Senate, stressed that the time limits, exhaustion
requirements, and other provisions of Section 205 of the Social
Security Act and regulations of the Secretary "are critical to the
orderly administration of the program" and that the omission of those
requirements in the medical improvement section of this special
legislation "should not be interpreted as detracting from their broad
applicability." Id. at S11454.  See also S. Rep. 98-466, supra, at 15.

   /9/ The class in this case was not defined to include only those
individuals whose claims for benefits actually involved the medical
improvement issue.  It was defined to include all Pennsylvania
residents whose disability benefits have been terminated or are
threatened with termination (C.A. App. 40).  This class definition
presumably is attributable to the fact that, as we have noted (see
page 2, supra), respondents raise issues other than medical
improvement.  The claims of the individual class members in this case
that raise these other issues are covered by the special statutory
remand procedure even if they do not raise the medical improvement
issue, because the class action is one "relating to medical
improvement." All that is necessary in order for an individual member
of a class in such a case to be included in a remand is that he was
found not entitled to receive benefits because his "impairment * * *
has ceased, does not exist, or is not disabling" (Section 2(d)(3)(A),
98 Stat.1798) -- i.e., that his benefits were terminated because of a
determination relating to his impairment, and not, for example,
because of fraud or because he had returned to work.  The additional
issues raised in the complaint in this case (see page 2, supra) fall
within the covered category.  Moreover, many of the additional issues
respondents raise are themselves addressed by 1984 Act.  See Section
3, 98 Stat. 1799 (evaluation of pain), Section 4, 98 Stat. 1800
(multiple impairments), Section 9, 98 Stat. 1804 (evidence from the
treating physician).  If an individual class member elects after
remand to have his case reviewed, the standards in the 1984 Act with
regard to these issues would also apply in that review.

   In other class actions, however, where the class or a subclass is
confined to persons whose individual claims actually raise the medical
improvement issue, only such persons would be entitled to the remand
relief.

   /10/ Of course, in the case of any named or unnamed class members
who already have been found to be entitled to continue to receive
benefits even under the Secretary's interpretation of prior law, there
will be no occasion for the Secretary actually to reopen and
redetermine their claims after remand.

                               APPENDIX