Justices Allow Court Review of Denial of Disability Benefits

WASHINGTON (CN) – Reversing the Sixth Circuit, the Supreme Court on Tuesday unanimously held that a federal district court may hear a man’s claims that the Social Security Administration improperly denied his disability benefits. 

In this Oct. 5, 2018, file photo, the U. S. Supreme Court building stands quietly before dawn in Washington. (AP Photo/J. David Ake, File)

Stemming from Ricky Lee Smith’s application for disability benefits in 2012, the case asked the justices to decide whether a dismissal by the Social Security Administration’s Appeals Council on procedural grounds allows a person denied benefits to petition a federal court for review of the decision. 

Smith’s initial claim for benefits was denied three times as it worked through the agency’s review process, including after a hearing before an administrative law judge. After the administrative law judge denied his claim, Smith asked the appeals council to hear his case, though the two sides disagree about whether he did so within the required 60-day timeframe.

The Social Security Act allows a federal court to hear the results of “any final decision… made after a hearing,” but under the agency’s regulations the appeals council dismisses appeals filed after the 60-day deadline.

Smith brought his case to the U.S. District Court for the Eastern District of Kentucky, but the court tossed aside his claims, saying the appeals council’s dismissal on timeliness grounds was not a “final decision” that can be reviewed in federal court. The Sixth Circuit upheld that decision.

In a 16-page opinion Tuesday, Justice Sonia Sotomayor wrote this was not the correct way to read the judicial review provision for decisions of the Social Security Administration. She wrote the appeals council’s decision was “the final stage of review” for Smith’s case and that he had a hearing before an administrative law judge that satisfied the provision’s second requirement.

She also wrote that courts generally presume Congress intended them to review the decisions of administrative agencies, saying this helps answer the question of whether the law lets people who receive decisions similar to Smith’s have their day in court.

“In light of the text, the context and the presumption in favor of the reviewability of agency action, we conclude that it does,” Sotomayor wrote.

Sotomayor did not side with Smith, however, on the question of what should happen next. While Smith argued if the district court agrees with him that he made the 60-day deadline it should go straight to the merits of his claims, the Supreme Court ruled lower courts should generally only review the procedural claims and send the merits back to the agency to hear the rest of the case.

Michael Kimberly, an attorney with the Washington, D.C., firm Mayer Brown who argued the case for Smith, said he is “very pleased” with the court’s decision.

“It’s a very gratifying win that means supplemental security income applicants whose claims are denied on technical grounds will still get their day in court,” Kimberly said in an email. “Perhaps the greatest significance of the case is that the court clarified that agencies do not get deference from courts on the question of the scope of judicial review.”

The Justice Department did not return a request for comment. While the agency argued against Smith at the lower courts, it reversed its position at the Supreme Court and told the justices the decision should be subject to judicial review.

With no party to the case supporting the Sixth Circuit’s holding, the court appointed Deepak Gupta, of the Washington, D.C., firm Gupta Wessler, to argue in favor of the decision.

Gupta told Courthouse News that several thousand claims are dismissed by the appeals council, some of which could now be eligible for review in federal courts. He also said the ruling will likely result in the Social Security Administration changing how it handles claims such as Smith’s.

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