Kavanaugh, Deference, the Administrative State, and Smith v. Berryhill

We start with Garco Construction, Inc. v. Speer.  Justices Thomas and Gorsuch dissenting from the denial of certiorari complained that Garco was the right case to revisit and presumably gut if not kill the Auer deference doctrine.  In Perez v. Mortgage Bankers Ass'n, Justice Alito said that he waited for the right case to explore Seminole Rock, the progenitor of Auer deference.  In Decker v. Northwest Environmental Defense Center, Chief Justice Roberts stated that it may be appropriate to review Seminole Rock, but not in that case.  For those keeping score at home, that is four votes to revisit the Seminole Rock-Auer deference doctrine.  Kavanaugh will make five and that my friends is a majority of a nine-person court.  (I write this on the assumption that Judge Kavanaugh will be Justice Kavanaugh in three days or less). 

As a refresher - an agency promulgates regulations permitted by statute to fill in the gaps in the statute or to even interpret the statute.  As long as the interpretation is not inconsistent with the statute or plainly erroneous, the understanding of the statute in the regulations gets deference.  The understanding of the statute may not be the best interpretation, just not inconsistent or plainly erroneous.  That is the Chevron deference doctrine off the back of my hand.  Regulations go through notice and comment requiring the agency to respond.  That regulatory rule making process has a safeguard in the notice and comment process. 

But regulations are written by people and sometimes those regulations are ambiguous.  Enter the Seminole Rock-Auer deference doctrine.  The agency can tell us what the regulation means by stroke of the pen.  That interpretation does not need notice or comment.  No procedural safeguards exist.  The agency just changes its mind. 

Acquiescence Ruling 99-4(11) informed the Social Security world that the Eleventh Circuit decision in Bloodsworth v. Heckler was wrong.  Here is what the agency said in restricting Bloodsworth to the boundaries of the Eleventh Circuit:

The Eleventh Circuit held that an Appeals Council dismissal of a request for review of an ALJ decision is a "final decision of the Secretary made after a hearing" (now a "final decision of the Commissioner of Social Security") within the meaning of section 205(g) of the Social Security Act and, therefore, subject to judicial review.

Contrary to the holding of the court in Bloodsworth, SSA policy is that the regulations make a clear distinction in regard to rights of judicial review between dismissals and determinations on the merits by the Appeals Council. The Appeals Council may take three types of action following an ALJ decision: (1) it may grant a request for review; (2) it may deny a request for review; or (3) it may dismiss a request for review. The dismissal of a request for review of an ALJ decision is binding and not subject to further review. 20 CFR 404.972, 416.1472. See also 20 CFR 404.955, 416.1455, 422.210. The Appeals Council will dismiss a request for review if it is untimely filed and the time for filing has not been extended.[6]The Appeals Council may also dismiss a request for review for other prescribed reasons. 20 CFR 404.971, 416.1471.

SSA's position, based on the above-cited regulations, is that an Appeals Council dismissal is not a "final decision of the Commissioner of Social Security made after a hearing." Therefore, such a dismissal is not judicially reviewable under section 205(g) of the Social Security Act (42 U.S.C. 405(g)).

That issue is now before the Supreme Court in Smith v. Berryhill on a petition for certiorari.  The Solicitor General agrees with Smith that the AR followed by the Sixth Circuit is wrong and that the Supreme Court needs to resolve the issue to fix the split in the circuits. 

In the administrative state, the courts permit the agency to interpret the statute.  In the administrative state, the courts permit the agency to change the rules by interpreting the regulations.  When the agency takes these acts through the subregulatory process, the agency does so without notice and comment.  Our liberal colleagues may not like the conservatives on the Supreme Court but on this issue and in reigning in the agency's reinterpretations in flux, those justices hostile to the blowing winds of discretion are our friends. 

ODAR Hasn't Vetted POMS ... So What?

I attended a bench bar meeting at the Los Angeles US Attorney's office for the federal social security practice in the Central District of California last week.   AAJ Gerald Ray spoke on behalf of SSA.  He waxed eloquent about statistics and the need for ALJ decisions to follow policy.   The latter point begs the question -- where do I locate agency policy.

So I asked the question, does the Appeals Council consider POMS to constitute agency policy?   Judge Ray answered the question directly enough;  he said "no."

Never satisfied with the response of the government,  I thought we might unpack that comment in context of Judge Ray's oration and,  what the heck,  the Act, regulations, and the rulings.

SSA receives 2.8 million claims for disability each year.   Of those eventually granted,  SSA grants 75% of those claims in initial or reconsideration stages.  ODAR receives 500,000 claims per year.   ODAR grants less than half of those making 25% of the findings of disability.   So who are the experts at disability adjudication,  the dog or the tail?

So it can't be that the part of the agency that publishes POMS doesn't know what it is talking about.  Clearly it does and directs the state agencies nationwide on how to exclusively adjudicate 2.3 million claims annually without the interference or oversight of ODAR, thank you very much.

The problem arises for claimants that shift during the claim.   They change age categories,  past work ceases to have relevancy,  or the medical evidence changes in a material way.   If the substantive rules effectuating the statute and regulations change too,  then the program is not stable and the failure to have policy apply from top to bottom enhances the lottery effect of a claim for benefits.

SSA does have a caveat on the published e-version of POMS:

Please note that this document is intended for SSA employees. It contains technical terms and instructions that will be unfamiliar to you. If you have difficulty understanding these materials, please click on this link to the Social Security Handbook, which is written in plain language for use by the public.

 Does the Handbook contain agency policy.  Not as far as anyone can tell.  SSA lists POMS as one of its Current Program Rules.  The agency lists the Handbook as one of the Social Security Program Rules but oddly not as current.  More importantly, Judge Ray listed HALLEX as binding but its status is on the same category of POMS as a current program rules set.

The regulations list POMS as other written guidelines that instruct, interpret, clarify, or administrate. 20 CFR sec. 404.1602.   The state agency "will" comply with other written guidelines.  Sec. 404.1603.  SSA can find that the state agency failed to meet the applicable standards if it does not follow POMS.  Sec. 404.1671.

SSR 00-4p states that the agency cannot accept evidence from a vocational expert of specialist that conflicts with agency policy.  SSR 13-2p states that the agency requires all adjudicators at all levels of review to follow agency policy and specifically lists POMS right alongside HALLEX.  And other rulings contain cross-references to POMS -- as in, for more information on this topic, see also POMS.
Okay, ODAR doesn't want the lowly technical people to tell its legally trained staff how to adjudicate claims.  I get that.  But the statute and the issue of disability are medically and vocationally technical, not legally technical.  Using legal techniques and a quasi-judicial format can unwrap the issue of disability, but it remains a mixed medical and vocational issue.

I wrote about the transferable skills analysis back in May.  Judge Ray told me off the podium and privately -- but not confidentially -- that ODAR has vocational experts and no need for POMS dissertation on a transferable skills analysis.  I responded that the agency did not pay VE witnesses enough and that we get what we pay for in life.  He conceded that existence of a problem.  The question in this complex question of medicine and the ability to work is whether we have standards (POMS unless contrary to the regulations or the statute) or just let the ALJ corps, medical experts, and vocational experts do and say whatever their own heuristic and biased view of the world tells them is the right result for this case.

One last point: after 30 years, I have a pretty good handle on this stuff.  I can understand the technical writing in POMS.  I don't need the dumbed down version in the Handbook.  But if POMS is not interpretative of ambiguous regulations and it doesn't matter, then delete it.  The whole thing.  To leave it up and when I cite say - "psych, just kidding.  We don't follow POMS" - well that is just a lie published on the internet and available at the District Office and ODAR says it is worthless.  As I said to Judge Ray during the open session, "we'll see."

Almost 3 million claims deserve better than a lottery.  Public confidence in a system of administrative jurisprudence that touches everyone requires a government tell it the straight substantive and procedural rules.  If ODAR hasn't bothered to consider an issue, then it should follow POMS and vet something else later if ever.

The agency obviously differs and uses POMS only when it likes POMS or the result pushed by POMS.  Inconsistent and intellectually dishonest.