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7th Circuit overrules decades-old precedent, orders more proceedings on benefits case

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The 7th Circuit Court of Appeals reversed the dismissal by a federal judge of a woman’s petition for judicial review of the decision to deny rehearing her request for Social Security disability benefits. In doing so, the judges overruled a 1980 7th Circuit decision with similar facts.

Marilyn Boley was denied benefits by the Social Security Administration. Instead of requesting a hearing by an administrative law judge within 60 days of the denial as is allowed by regulations, Boley took nine months to make the request. The SSA notified Boley of its decision to deny benefits but did not send the notice to her attorney. Boley was ill at the time and relied on her attorney to protect her interests.

When her lawyer requested the hearing, the ALJ dismissed the request. The ALJ ruled Boley lacked “good cause” for the delay in her request, so an extension of time to file is not supported.

Chief Judge Richard Young in the Southern District of Indiana then dismissed Boley’s petition for judicial review, ruling that the ALJ’s decision to dispense with an oral hearing means that he court lacks subject-matter jurisdiction. Young relied on 42 U.S.C. Section 405(g), which authorizes review of the agency’s final decisions, to make his decision.

This case hinges on what is considered a “hearing,” which Young assumed meant an oral procedure required by a statute or regulation. The 7th Circuit concluded that “hearing” means whatever process the SSA deems adequate to produce a final decision – a view that no court of appeals has explicitly adopted. The panel’s decision follows Weinberger v. Salfi, 422 U.S. 749, 763-67 (1975), and Matthews v. Eldridge, 424 U.S. 319, 326-32 (1976). Under those cases, Boley is entitled to judicial review of her contention that the agency mishandled her case.

But 34 years ago, the 7th Circuit Court in Watters v. Harris, 656 F. 2d 234 (7th Cir. 1980), held otherwise. Watters is materially identical to Boley’s situation, but in that case, the appeals panel dismissed for want of jurisdiction and held that the agency’s decision to not take oral testimony blocked judicial review. Watters made jurisdiction turn on the presence of a constitutional argument, but Monday, the panel decided that Watters is wrongly decided.

“The prospect of moving from one side of a conflict to another is not attractive, especially when the conflict is so old and the Supreme Court has been content to allow the disagreement to continue. Nonetheless, we have a duty to apply §405(g) the way the Supreme Court did in Salfi and Eldridge, and we very much want to give the statute a reading that avoids unnecessary constitutional litigation of the kind that Watters and similar decisions invite,” Judge Frank Easterbrook wrote.

Watters is overruled. This opinion has been circulated to all judges in active service under Circuit Rule 40(e). None requested a hearing en banc.

The District Court’s judgment is vacated, and the case is remanded with instructions to decide whether substantial evidence, and appropriate procedures, underlie the decision that Boley lacks ‘good cause’ for her delay in seeking intra-agency review.”

The case is Marilyn R. Boley v. Carolyn W. Colvin, acting commissioner of Social Security 13-1252.
 

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