7th Circuit reverses dismissal of ‘arbitrary’ Appeals Council decision

January 31, 2017

The 7th Circuit Court of Appeals Tuesday reversed an Appeals Council decision to dismiss an Indiana man’s good cause request after initially granting the request, finding that the sudden change of course was arbitrary.

After beginning to receive Social Security disability benefits in 1979, John Casey entered the federal Witness Protection Program and was informed that he could not simultaneously receive his witness protection stipend and his disability benefits. However, Casey was then later told that he could receive both income streams and that as remuneration for cooperating with the government, he would continue to receive disability benefits throughout his life.

But in 2009, the Social Security Administration notified Casey that he had been overpaid by more than $330,000 in disability benefits. Casey did not seek timely reconsideration of that determination but instead requested a waiver of the overpaid amount under U.S. Code 404(b)(1) in 2010.

SSA officials denied Casey’s waiver request, and that decision was upheld by an administrative law judge in 2011. Casey then failed to submit a timely request for review of the ALJ’s decision, but his attorney invoked the good cause exception for untimely requests in March 2012. The attorney told the Appeals Council that neither he nor his firm had received a copy of the ALJ’s decision until “several months” later. Thus, the attorney asked the council to find that Casey had good cause for late filing and to grant his additional time to secure information and evaluate the appeal as if it had been timely.

The Appeals Council initially granted the good cause request and invited Casey to submit new evidence material to the issues. However, the council then dismissed Casey’s request for review in July 2013, declining to decide the merits of the waiver claim and instead writing that he failed to provide a “good cause” statement.

Casey sued in the U.S. District Court for the Northern District of Indiana, but Judge Rudy Lozano dismissed the claim. On appeal, the Social Security commissioner chided Casey for “failing to allege facts in his complaint showing that the request for review was timely filed or that he had ‘good cause’ for his untimely filing.’”

“But why should Casey have alleged such facts?” 7th Circuit Court of Appeals Judge David Hamilton wrote Tuesday. “Notwithstanding the Appeals Council’s baffling dismissal order, the Council plainly granted Casey’s request for additional time to pursue his administrative appeal.”

Hamilton noted that the council never directed Casey to complete a “good cause” statement, yet used the lack of such a statement as the basis for its denial. But because such a request was never made, “Casey had no reason to relitigate that question in federal court.”

Further, the 7th Circuit panel found that Casey did, in fact, make a viable showing of good cause because his attorney explained that he did not receive a copy of the ALJ’s decision until he contacted the chambers.

Finally, Hamilton wrote Tuesday that the arbitrary dismissal of Casey’s claim meant there was no final decision on its merits. Thus, the 7th Circuit wrote that it cannot decide whether Casey is entitled to the waiver of the overpayments. Instead, the circuit court remanded the case back to the agency to consider that question.

The case is John R. Casey v. Nancy A. Berryhill, Acting Commissioner of Social Security, 15-2810.


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