Brown v. Arizona -- The Scope of En Banc Review and Resuscitating Waived or Forfeited Issues

Brown v. Arizona rests on horrific facts. Bradford abused three women while a student at the University of Arizona. Brown brought an action seeking to impose liability on the university (state) for the abuse that she endured under Title IX, 20 U.S.C. §§ 1681–1688. The District Court and the three-judge panel decision rules against Brown on the context, authority, and indifference elements (of five elements of the claim for relief) for imposing liability. The issue centers around the context element. Brown changed her theory before the en banc court. I write to discuss how and why the Court allowed Brown to change her theory of the case not advanced in the District Court and not advanced to the three-judge panel. 

From the panel decision, Brown argued that:

she does not have to show that the University controlled the context of her abuse, only that the University controlled the context in which it improperly failed to act, i.e., Bradford's assaults on [two other students].

Judge Forrest, joined by Judge Nelson, described the dissent as rejecting Brown's theory. Judge W. Fletcher characterized the briefing: 

Brown argues that because the University had control over the context of Bradford's assaults on Student A and DeGroote, it necessarily had control over the context of Bradford's subsequent assaults on other university students including Brown, regardless of where in the community the assaults took place.

Judge Fletcher rejected that theory of the case and describes the facts supporting a different theory that satisfies the "context" element. Brown petitioned for en banc review. The majority of nonrecused judges voted to rehear the case en banc. Ordinarily, the en banc panel rehears the case without further briefing. It is clear that on the theory pressed in the District Court and before the three-judge panel that Brown loses. No judge accepted her "context" theory of the case. Brown asks for and the Court grants the opportunity to submit further briefing. 

On en banc review, Brown wins 8-3. Judge Forrest wrote the panel majority decision but was not on the en banc panel. Judge Fletcher writes the majority opinion. Judge Nelson, Judge Rawlinson, and Judge Lee write separate dissents. Judge Friedland responds to the waiver argument raised by Judge Nelson and Judge Rawlinson. We start with Judge Nelson's dissent.

Judge Nelson describes Brown has having "expressly disclaimed that position below and before the three-judge panel on appeal." Judge Nelson worries that "the majority encourages future plaintiffs to hed the ball on their arguments for strategic litigation advantage." As a practitioner before the Court of Appeals, I want to go on record and assure Judge Nelson and the rest of the Court that plaintiffs and appellants actually try to make the best attempt to frame the issues and theories. That attempt does not bind the courts to doing something that is different. For instance, in the seminal Erie Railroad Co. v. Tompkins, no party advocated the proposition adopted -- that the federal courts adopt and apply state court decisions construing the common law in a diversity action. The courts have a responsibility to articulate the law correctly even when the parties have chased the wrong rabbit down the wrong hole. 

Judge Friedland says that in her concurrence. Judge Friedland posits that if the panel had rejected Brown's claim on the theory pressed in an unpublished memorandum decision, the case would have died. Because the panel published the opinion and discussed the law of "context" at length in both the majority and dissenting opinions, "it is crucial that we get the law right." 

Judge Rawlinson expresses the vigorous and rigorous adherence to the twin pillars of waiver and forfeiture. Citing Hamer v. Neighborhood Hous. Servs. of Chi.:

Waiver is the “intentional relinquishment or abandonment of a known right.” Id. (citation omitted). Forfeiture is the “failure to make the timely assertion of a right.” Id. 

Waived issues are not reviewable. Forfeited issues are reviewed for plain error. Judge Rawlinson characterizes the disclaimed issue as one of forfeiture by the majority. Judge Rawlinson argues that no case allows the courts to review an argument "affirmatively disclaimed by a party." Judge Rawlinson would instead treat the disclaiming of a theory as one of waiver barring review of that issue. 

Judge Friedland responds that the Court cannot permit a published opinion to incorrectly state the law. Published opinions constitute precedent. It is the obligation of the en banc court to ensure that the body of precedent correctly states the law. 

The Court let Brown off the hook. The case presents compelling facts that cry for relief. Shifting theories from the district court to the court of appeals will almost always result in a complete and total loss. That does not mean that the opening brief in the court of appeals should not address the holding of the district court, it should. But now, Brown is undeniably the law of the circuit not only on Title IX but on the procedural ability under the right facts to shift the theory of the case and pray for the court's discretion.

Not planning on trying this, intentionally.

___________________________

Suggested Citation:

Lawrence Rohlfing, Brown v. Arizona -- The Scope of En Banc Review and Resuscitating Waived or Forfeited Issues , California Social Security Attorney (September 28, 2023) https://californiasocialsecurityattorney.blogspot.com

The author has been AV-rated since 2000 and listed in Super Lawyers since 2008.

  

Presenting Evidence of Job Numbers and Waiver

On May 18, 2017, I argued Shaibi v. Berryhill to a panel of the Ninth Circuit.  That led to the panel decision.  The court found that:

We now hold that when a claimant fails entirely to challenge a vocational expert's job numbers during administrative proceedings before the agency, the claimant waives such a challenge on appeal, at least when that claimant is represented by counsel.

Shaibi isn't final.  Despite being issued on August 22, 2017, the mandate has not issued.  Shaibi filed a petition for rehearing and rehearing en banc that remains pending with the court.  The question is whether the Occupational Outlook Handbook and County Business Patterns have the same status as the Dictionary of Occupational Titles -- the claimant can bring that evidence in at the judicial review level for the first time.  While I think the answer is yes, I am not optimistic.

On November 14, 2017, I argued Holden v. Berryhill to a panel of the Ninth Circuit that included Judge Murguia, a member of the Shaibi panel.  Holden did not have an attorney representative at the hearing -- he had a non-attorney representative at the hearing.  The Commissioner argues that a non-attorney qualified for direct payment of fees passes a test, maintains insurance, and qualifies as counsel under the Shaibi and Meanel test.  The panel did not press OGC on that concept that "counsel" includes non-attorneys. 

This is your pre-decision warning and notice.  Shaibi will likely survive and Holden will likely expand the waiver doctrine to include non-attorneys that are eligible for direct payment.  Whenever the vocational expert gives job numbers and the representative thinks that there is a real possibility that the ALJ will accept the vocational expert testimony to deny the case, the representative must break out the books, fire up the computer, print the pages, and present the contrary data to the ALJ and to the Appeals Council. 

I am not addressing the clear loser case.  A younger individual capable of a limited range of light work but still capable of the full range of sedentary work -- the claimant loses on the sedentary grid table.  Likewise, a person closely approaching advanced age capable of a narrow range of medium work but still capable of a wide range of light and sedentary work -- the claimant loses.  We are concerned about those cases where if the claimant cannot perform the identified work, and work of the same ilk, that the claimant wins.  A limited range of sedentary work at all ages; a limited range of light work for a person 50-54; a person over 55 with a limited range of medium work -- those cases require the full-court press. 

I said this at NOSSCR in September -- if you don't want to press the job numbers on the cusp cases, don't take the cusp cases.  If you take the case and don't present evidence of VE fraud (yes, I used that word), then don't be surprised if the claimant gets his/her benefits through a civil action for malpractice.  We need to start taking the cusp cases seriously and not depend on the lottery that this claimant will get one of those ALJ's that understands the mendacity of the vocational experts or that the disability bar is not supposed to be a hike up Mount Everest.  Those judges are not in the majority -- they are in the increasingly small minority. 

Notes on Finnegan-Crews v. Colvin

The Ninth Circuit made a number of pedestrian observations in the unpublished opinion of Finnegan-Crews v. Colvin.  These unpublished opinions give insight into how we can expect the court to handle similar questions in other cases.  Unpublished opinions are never precedent and may have dubious persuasive value.  Attorneys should always use caution in resorting to unpublished opinions.

The most troubling part about the court's decision is the reference to ALJ issue waiver.  It is easy to read the language contained in the decision for the proposition that this person who proceeded at least in the Ninth Circuit without the benefit of an attorney waived an issue.  The courts generally give people proceeding without benefit of counsel a break in terms of the rules.

Government counsel will likely read this decision as permitting the agency to argue that the claimant for benefit that fails to raise an issue before an ALJ may not raise it in court.  That really isn't the point of this decision nor the authority relied upon by the Ninth Circuit (Greger).  Finnegan-Crews didn't raise the hip injury issue either before the ALJ or the District Court.  Properly read and parsed, raising the issue of the disabling hip injury before either the ALJ or the District Court may have saved Finnegan-Crews from the waiver doctrine.

The Legal Kernels Derived from Finnegan-Crews

The court has jurisdiction pursuant to 28 USC § 1291.

The court reviews the District Court’s decision to novo.  Ghanim v. Colvin, 763 F.3d 1154, 1159 (9th Cir. 2014).

Finnegan-Crews waived her contention regarding a disabling hip injury by failing to raise it before the administrative law judge (“ALJ”) or the district court.  See Greger v.  Barnhart, 464 F.3d 968, 973–74 (9th Cir. 2006). 

The ALJ may reject the opinions of the treating physician for specific and legitimate reasons, supported by substantial evidence.  Ghanim v. Colvin, 763 F.3d 1154, 1160–61 (9th Cir. 2014); Batson v. Comm’r of Soc.Sec. Admin.,  359 F.3d 1190, 1195 (9th Cir. 2004). 

The ALJ must use a two-step analysis to provide specific, clear, and convincing reasons to reject testimony and to find other statements not fully credible.  Rounds v. Comm’r of Soc. Sec.Admin., 807 F.3d 996, 1006 (9th Cir. 2015) (ordinary tests of credibility and observations permitted); Treichler v.Comm’r of Soc. Sec. Admin.,  775 F.3d 1090, 1102–03 (9th Cir. 2014) (the ALJ must specifically identify the testimony he finds not credible and explain what testimony undermines that testimony); Molina v. Astrue, 674 F.3d 1104, 1113 (9th Cir. 2012) (rejecting testimony where the medical evidence showed the anxiety disorder well-controlled with medication and other self-combing measures).

EM-13024 And Fees to Representatives that Waive Direct Payment

The Social Security Administration regulates fees that representatives can charge and receive.  The Program Operations Manual System (POMS) confirms agency policy.  The regulations carve out an exception when SSA will not involve itself in the authorization of when a representative can charge and receive a fee.  20 C.F.R. sec. 404.1720(e).  That exception concerns payment an entity or government agency will pay the representative.  The exception has two elements:  (1) the claimant will not have liability to pay fees or expenses to the representative or someone else; and (2) the representative tells SSA that he/she is waiving the fee from the claimant.  The form is SSA-1696 - the appointment of representative form.  The portion of the form provides:

I certify that my fee will be paid by a third-part entity [...] that the claimant [is] free of all liability [...]  to pay any fee or expenses to me or anyone as a result of their claim(s) or asserted rights(s).  [...] Do not check this box if a third-party individual will pay the fee.)

Now for the fun stuff.   On July 15, 2013, SSA published an Emergency Message.  EM-13024 provides guidance on what to expect when a claimant has multiple representatives and SSA approves the fee agreement (the expedited fee process).  The first and third examples reflect the waiver fees benefiting the claimant and not the representatives.  If the waving representative is a member of the firm that will receive a fee, the fee is reduced.  If the waiving representative is not a member of the firm that will receive a fee, the fee is not reduced.  I am not sure how that differentiation squares with HALLEX I-1-2-18.  When a representative waives, the other representatives should receive a percentage of the fee regardless of whether the waiving representative was a member of the firm.

The EM represents a concession that permits claimants to change representatives and permit the new representative to receive a full fee.  Many representatives won't take a claim if they can't get the fee agreement approved.  No one likes fee petitions and SSA sees a way to accommodate the interests of the claimants and the representatives as long as the waiving representative comes from a different firm from the other representative(s).

Now the hard part -- example two is wrong.  Examples one and three represent an accommodation and a sub-regulatory address of a bare bones statutory scheme.  But the second example contradicts the regulation.

The regulation permits a representative to get paid by a third party if and only if the claimant has no liability to any representative for the fees or expenses associated with the claim.  The appointment of representative form tracks the regulation.  But example two allows the representatives from firm A to receive the fees while the solo practitioner gets paid by a third-party entity. We can ignore the withdrawing representative from firm B so the redacted example is this:

The claimant appointed two representatives from Firm A, [...] and one representative who is a sole practitioner. [...] The sole practitioner waived charging and collecting a fee from the claimant or any auxiliary beneficiaries because a third party entity will be paying his or her fee. The two representatives from Firm A have an approved fee agreement that each of them signed, and SSA determines a fee of $6000. The representatives from Firm A will receive $3000 each.

The claimant in the example has a liability to the representatives from firm A.  SSA pays the fees but that payment comes from the past due benefits -- making the liability or payment indirect.

If the sole practitioner gets paid by firm A, then the representatives are paying the solo to represent the claimant without SSA authorization over the fee.  While that fits with fee splitting rules under the Rules of Professional Conduct and the Model Rules, it doesn't fit with the expedited fee process and the regulations stating that SSA will authorize not only the fees to the representatives from firm A and the payment to the solo.

If the sole practitioner gets paid by someone else (an insurance carrier or a governmental entity), then a real question exists about the value of the services provided by the members of firm A or the solo or both.  If the claimant ends up with the representatives from firm A, the only reason to permit the solo to get paid by the third-party entity is a time saving device and the assumption that the third-party entity can protect its own interests.  If the claimant ends up with the solo and the paying entity is firm A, then SSA is encouraging a business model that violates the regulation and defeats the interest of the claimant.

The claimant hires firm A.  The claimant appoints one or more representatives from firm A to represent the claimant at the hearing.  SSA sets the claim for hearing.  Firm A hires the solo to appear at the hearing.  The claimant finds out about the solo the day of the hearing or some time shortly before the hearing.  The claimant does not get the continuity of representation, the representative most familiar with the claim, or someone responsible for the claim at the firm.  The arrangement violates the regulation and removes the financial supervision of the representation by the solo by SSA.

EM-13024 will sunset on January 15, 2016.  SSA should delete example 2.  It violates the regulation.

Harshaw v. Colvin

The Ninth Circuit affirmed in an unpublished memorandum the claim for disability in Harshaw v. Colvin.  The non-precedential memo deserves note because it marks a dangerous and wrong trend.  The court imposed issue exhaustion from the ALJ level.

Harshaw relies on Meanel v. Apfel and Silveira v. Apfel to get to the point of exhaustion and the absence of waiver of the exhaustion rule.  I know a little about those cases -- I was counsel in both. . Meanel has pedestrian pedigree.  She sought to attack vocational expert testimony based on evidence from a private vendor about job numbers; evidence never presented to the agency.  Meanel says "too late."  The claimant had counsel and court is too late.

Silveira had a companion case, Vargas.  Both raised the legal issue of application of the grids to individuals with semi-skilled backgrounds, no transferable skills, and illiterate in English.  Vargas did not raise the issue in the District Court.  Silveira did.  The court found that the legal issue was not waived and reversed in Vargas.

What do either of these cases have to do with Harshaw?  Not much.  Harshaw presented evidence to the ALJ that he suffered from pes planus, PTSD, and a personality disorder.  The record contained the evidence.  In Meanel, the record did not contain the job numbers evidence.  Sound different?  It is.  Expanding Meanel to include not only that the claimant present the evidence but also make a specific argument about the application of that evidence asks too much.  The evidence raises the issues and the ALJ is the inquisitor, not an adversary.  Meanel just doesn't apply, at all.

The district court had the first bite at the apple in Harshaw.  The court relied on two other USDC decisions:

Cisneros v. Colvin,No. 12-cv-0931-BAM, 2013 WL 5375490 at * 9 (E.D. Cal., Sept. 24, 2013) (finding waiver when plaintiff failed to raise the issue of improper past relevant work determination during administrative proceedings); Shaw v. Comm'r of SSA, 2008 U.S. Dist. LEXIS 30170, *20 (N.D. Cal. 2008) (Claimant waived argument challenging past relevant work when he failed to raise that objection at the hearing);

In a typical hearing, the ALJ will ask the vocational expert to characterize the claimant's past relevant work.  The VE's get it wrong because the witness does not have access to the earnings record.  The VE will miss earnings that do not qualify as substantial gainful activity or occurred too long ago to count.  But the claimant has the burden of establishing that s/he cannot perform the past relevant work.  In cases where the VE mischaracterizes the past work and the represented claimant does nothing, then Houston, we have a problem.  That isn't waiver; that is a decision that rests on substantial evidence before the agency at the time of the decision.  Coming up with new evidence or arguments about the true nature of the past work might be too late.

But those aren't the facts of Harshaw.  The claimant alleged that the ALJ missed the other impairments and that those impairments made a difference in the outcome of the case.  Waiver -- no, the evidence was there and the claimant never has a burden to argue the case, just the burden to present the evidence that supports the claim.

The Ninth Circuit memorandum ends with the caveat that the missed impairments did not cause other limitations.  Well, if that is the case, then the waiver discussion is irrelevant.  The court should have issued a one paragraph memorandum, the last paragraph.