                                           In the

         United States Court of Appeals
                         For the Seventh Circuit
                              ____________________  

No.  13-­‐‑1252  
MARILYN  R.  BOLEY,  
                                                                  Plaintiff-­‐‑Appellant,  
                                              v.  

CAROLYN   W.   COLVIN,   Acting  Commissioner  of  Social  Securi-­‐‑
ty,  
                                           Defendant-­‐‑Appellee.  
                              ____________________  

              Appeal  from  the  United  States  District  Court  for  the  
                Southern  District  of  Indiana,  Evansville  Division.  
          No.  3:12-­‐‑cv-­‐‑27-­‐‑RLY-­‐‑WGH  —  Richard  L.  Young,  Chief  Judge.  
                              ____________________  

         ARGUED  OCTOBER  2,  2013  —  DECIDED  AUGUST  4,  2014  
                     ____________________  

        Before  EASTERBROOK,  MANION,  and  ROVNER,  Circuit  Judg-­‐‑
es.  
     EASTERBROOK,  Circuit  Judge.  Marilyn  Boley  asked  the  So-­‐‑
cial  Security  Administration  for  disability  insurance  benefits.  
The  agency  denied  her  request  initially  and  on  reconsidera-­‐‑
tion.  A  person  dissatisfied  with  such  a  decision  has  60  days  
to   request   a   hearing   by   an   administrative   law   judge.   20  
C.F.R.   §404.933(b)(1).   Boley   took   about   nine   months—but  
2                                                                             No.  13-­‐‑1252  

she   had   a   reason.   When   the   Administration   made   its   deci-­‐‑
sion  on  reconsideration,  it  notified  Boley  but  not  her  lawyer,  
despite   20   C.F.R.   §404.1715(a),   which   requires   notice   to   the  
claimant’s  representative.  Boley  was  ill  at  the  time  (she  was  
preparing   for   a   double   mastectomy)   and   relied   on   her   law-­‐‑
yer  to  protect  her  interests;  she  did  not  know,  until  it  was  too  
late,  that  her  lawyer  was  in  the  dark.  
     After  finding  out  what  had  happened,  Boley’s  lawyer  re-­‐‑
quested   a   hearing.   An   ALJ   dismissed   that   request,   ruling   it  
untimely   despite   the   agency’s   conceded   failure   to   follow  
§404.1715(a).   Regulations   allow   the   agency   to   extend   the  
time   when   “good   cause”   justifies   the   delay.   20   C.F.R.  
§§  404.911,   404.933(c).   In   response   to   written   submissions,  
the   ALJ   ruled   that   Boley   lacked   “good   cause”   because   she  
had  received  notice  and  could  have  filed  a  request  herself.  A  
federal  district  judge  then  dismissed  her  petition  for  judicial  
review,   ruling   that   the   ALJ’s   decision   to   dispense   with   an  
oral  hearing  means  that  the  court  lacks  subject-­‐‑matter  juris-­‐‑
diction.   Boley   v.   Astrue,   2013   U.S.   Dist.   LEXIS   9557   (S.D.   Ind.  
Jan.  24,  2013).  
   The   district   judge   relied   on   42   U.S.C.   §405(g),   which   au-­‐‑
thorizes   review   of   the   agency’s   final   decisions.   This   statute  
provides:  
      Any  individual,  after  any  final  decision  of  the  Commissioner  of  
      Social  Security  made  after  a  hearing  to  which  he  was  a  party  …  
      may   obtain   a   review   of   such   decision   by   a   civil   action   com-­‐‑
      menced   within   sixty   days   after   the   mailing   to   him   of   notice   of  
      such   decision   or   within   such   further   time   as   the   Commissioner  
      of  Social  Security  may  allow.  

The  ALJ’s  decision  in  Boley’s  case  had  not  been  made  “after  
a  hearing”,  and  that,  the  judge  thought,  is  that.  On  this  un-­‐‑
No.  13-­‐‑1252                                                                   3  

derstanding,   an   agency   can   prevent   judicial   review   of   any  
claim  for  benefits  by  the  expedient  of  refusing  to  hold  a  hear-­‐‑
ing,  even  when  the  claimant  is  entitled  to  one.  
    The   district   court   assumed   that   “hearing”   necessarily  
means  an  oral  procedure  required  by  a  statute  or  regulation.  
That   is   a   possible   reading—and   one   that   Rios   v.   Secretary   of  
Health,   Education,   and   Welfare,   614   F.2d   25,   26–27   (1st   Cir.  
1980),   adopted—but   not   an   inevitable   one.   McNatt   v.   Apfel,  
201  F.3d  1084  (9th  Cir.  2000),  concluded  that  a  claimant  had  
received  a  hearing,  and  was  entitled  to  judicial  review,  when  
the  SSA  had  made  a  final  decision  after  a  process  that  should  
have  included  live  testimony  but  erroneously  failed  to  do  so.  
And   in   federal   courts,   a   third   meaning   of   “hearing”—one  
that   dispenses   with   any   need   for   oral   presentations—is  
common.  District  courts  that  grant  summary  judgment,  after  
receiving  papers  and  legal  argument  but  not  live  testimony,  
write   that   they   have   decided   after   a   hearing.   Similarly   a  
court   of   appeals   will   state   that   it   has   “heard   and   deter-­‐‑
mined”   an   appeal   even   though   it   did   not   hold   oral   argu-­‐‑
ment.   On   this   understanding,   “hearing”   means   an   oppor-­‐‑
tunity  to  be  heard  out  to  the  extent  the  tribunal  itself  deems  
appropriate.   The   Supreme   Court   held   in   Richardson   v.   Per-­‐‑
ales,  402  U.S.  389  (1971),  that  Social  Security  benefits  may  be  
denied  without  oral  testimony  from  important  witnesses;  the  
Court   did   not   hint   that   it   was   thus   preventing   judicial   re-­‐‑
view  by  authorizing  decision  without  a  §405(g)  “hearing”.  
     We   think   the   third   possibility—that   “hearing”   means  
whatever   process   the   Social   Security   Administration   deems  
adequate  to  produce  a  final  decision—is  the  most  satisfacto-­‐‑
ry.  Although  no  court  of  appeals  has  adopted  that  view  ex-­‐‑
plicitly,   Shrader   v.   Harris,   631   F.2d   297,   300   (4th   Cir.   1980),  
4                                                                     No.  13-­‐‑1252  

does  so  implicitly.  Shrader  was  in  much  the  same  position  as  
Boley:  she  failed  to  make  a  timely  request  for  decision  by  an  
ALJ;   the   agency   decided   that   the   delay   was   not   justified   by  
“good  cause”;  the  claimant  then  sought  judicial  review.  The  
Fourth   Circuit   concluded   that   the   agency’s   decision   lacked  
the  support  of  substantial  evidence  and  remanded  for  a  de-­‐‑
cision  on  the  merits.  
    The   district   court   distinguished   Shrader   on   the   ground  
that  Shrader  was  mentally  ill  and  could  not  protect  her  own  
interests,  while  Boley  was  only  physically  ill.  But  this  is  un-­‐‑
related  to  the  meaning  of  “hearing”  in  §405(g).  Shrader  itself  
emphasized  that  the  claimant  had  presented  a  constitutional  
argument.   We   return   to   that   subject   below;   for   now   it   is  
enough   to   observe   that,   if   an   agency   acts   without   a   “hear-­‐‑
ing”   when   it   rejects   (on   a   paper   record)   an   argument   that  
good  cause  supports  a  belated  request  for  administrative  re-­‐‑
view,   then   the   nature   of   the   claimant’s   impairment   or   legal  
argument  is  irrelevant.  That’s  what  it  means  to  say  that  the  
court  lacks  subject-­‐‑matter  jurisdiction,  which  is  the  power  to  
decide   whether   a   legal   argument   is   sound.   See   Gonzalez   v.  
Thaler,   132   S.   Ct.   641,   648   (2012);   Bell   v.   Hood,   327   U.S.   678  
(1946).  A  court  cannot  say:  “the  plaintiff  has  a  good  claim,  so  
there   is   jurisdiction,   but   an   incorrect   claim   would   be   dis-­‐‑
missed  for  want  of  jurisdiction.”  
    Our   conclusion   that   “hearing”   means   a   decision   after  
whatever   process   the   Social   Security   Administration   itself  
elects   to   use   follows   from   Weinberger   v.   Salfi,   422   U.S.   749,  
763–67   (1975),   and   Mathews   v.   Eldridge,   424   U.S.   319,   326–32  
(1976).  In  Salfi  a  claimant  contended  that  one  portion  of  the  
Social   Security   Act   violated   the   Constitution,   and   that   with  
this   defect   corrected   she   would   be   entitled   to   benefits.   The  
No.  13-­‐‑1252                                                                             5  

agency   denied   her   application   without   an   oral   hearing,   rul-­‐‑
ing  that,  given  the  statutory  language,  none  of  the  potential  
factual  issues  was  material  to  the  claim.  In  Eldridge  a  claim-­‐‑
ant   contended   that   the   Due   Process   Clause   of   the   Fifth  
Amendment   entitled   him   to   a   hearing   on   a   factual   dispute;  
the   agency   disagreed   and   resolved   his   case   without   an   oral  
hearing.  
    In   both   Salfi   and   Eldridge   the   agency   made   a   final   deci-­‐‑
sion   after   a   process   the   agency   deemed   adequate,   and   in  
both  cases  that  process  did  not  include  an  oral  hearing.  Both  
Salfi  and  Eldridge  sought  judicial  review  and  were  met  with  
arguments   that   the   absence   of   an   oral   hearing   meant   that  
§405(g)   foreclosed   jurisdiction.   In   each   case,   the   Supreme  
Court   held   that   jurisdiction   existed.   Salfi   observed   that   it  
would   be   “futile   and   wasteful”   (422   U.S.   at   767)   to   hold   an  
oral   hearing   if   the   agency   thought   that   the   claim   could   be  
finally  resolved  without  one,  and  added:  
    the  [agency]  may,  of  course,  award  benefits  without  requiring  a  
    hearing.   We   do   not   understand   the   statute   to   prevent   [it]   from  
    similarly   determining   in   favor   of   the   applicant,   without   a   hear-­‐‑
    ing,  all  issues  with  regard  to  eligibility  save  for  one  as  to  which  
    [it]  considers  a  hearing  to  be  useless.  

Ibid.   It   followed,   the   Court   thought,   that   §405(g)   had   been  
satisfied.   This   necessarily   means   that   a   “hearing”   for   the  
purpose   of   that   statute   is   a   decision   after   whatever   proce-­‐‑
dures   the   agency   elects   to   use,   and   that   a   decision   not   to  
hold  an  oral  hearing  does  not  close  the  courthouse  door.  
    Eldridge  concluded  that  §405(g)  creates  two  requirements,  
only  one  of  which  is  strictly  jurisdictional  in  the  sense  that  it  
cannot   be   waived   by   the   parties.   “The   waivable   element   is  
the  requirement  that  the  administrative  remedies  prescribed  
6                                                                 No.  13-­‐‑1252  

by   the   [agency]   be   exhausted.   The   nonwaivable   element   is  
the  requirement  that  a  claim  for  benefits  shall  have  been  pre-­‐‑
sented  to  the  [agency].  Absent  such  a  claim  there  can  be  no  
‘decision’  of  any  type.  And  some  decision  by  the  [agency]  is  
clearly  required  by  the  statute.”  424  U.S.  at  328.  Once  again  
the  Court’s  point  is  that  §405(g)  allows  judicial  review  when  
a   claim   has   been   presented   and   finally   decided,   whether   or  
not  the  agency  thinks  live  testimony  necessary.  Boley  filed  a  
claim  for  benefits  and  pursued  it  as  far  as  the  agency  permit-­‐‑
ted;  under  Salfi  and  Eldridge  she  is  entitled  to  judicial  review  
of  her  contention  that  the  agency  mishandled  her  case.  
     Thirty-­‐‑four   years   ago,   however,   this   circuit   held   other-­‐‑
wise.  Watters  v.  Harris,  656  F.2d  234  (7th  Cir.  1980),  is  materi-­‐‑
ally  identical  to  Boley’s  situation.  Watters  missed  the  admin-­‐‑
istrative  deadline  for  seeking  a  decision  by  an  ALJ  and  con-­‐‑
tended   that   good   cause   justified   the   delay.   Without   an   oral  
hearing,  an  ALJ  rejected  that  argument  and  issued  a  final  de-­‐‑
cision   denying   Watters’s   claim   for   benefits.   When   Watters  
asked   the   judiciary   to   find   that   good   cause   indeed   existed,  
we   dismissed   for   want   of   jurisdiction   and   held   that   the  
agency’s   decision   not   to   take   oral   testimony   blocks   judicial  
review.   We   relied   on   Califano   v.   Sanders,   430   U.S.   99   (1977),  
for  the  proposition  that  only  if  a  federal  statute  requires  the  
agency  to  hold  an  oral  hearing  to  resolve  a  particular  claim,  
and  the  agency  complies,  is  judicial  review  possible.  
     Sanders  does  not  hold  anything  that  sweeping.  It  did  not  
purport   to   overrule   Salfi   or   Eldridge.   The   Court   considered  
whether   §405(g)   allows   review   of   a   decision   denying   a   mo-­‐‑
tion  to  reopen  a  final  decision  that  had  denied  an  application  
for   benefits.   The   Court   held   not,   because   §405(g)   sets   a   60-­‐‑
day   limit   on   petitions   for   judicial   review.   “[A]n   interpreta-­‐‑
No.  13-­‐‑1252                                                                    7  

tion   that   would   allow   a   claimant   judicial   review   simply   by  
filing—and   being   denied—a   petition   to   reopen   his   claim  
would   frustrate   the   congressional   purpose,   plainly   evi-­‐‑
denced  in  §[4]05(g),  to  impose  a  60-­‐‑day  limitation  upon  judi-­‐‑
cial   review   of   the   Secretary’s   final   decision   on   the   initial  
claim   for   benefits.   Congress’   determination   so   to   limit   judi-­‐‑
cial  review  to  the  original  decision  denying  benefits  is  a  poli-­‐‑
cy  choice  obviously  designed  to  forestall  repetitive  or  belat-­‐‑
ed  litigation  of  stale  eligibility  claims.  Our  duty,  of  course,  is  
to  respect  that  choice.”  430  U.S.  at  108  (citation  omitted).  In  
other  words,  one  opportunity  for  judicial  review  is  enough;  
a   claimant   who   bypasses   that   chance   cannot   create   another  
by  a  procedure  that  would  evade  a  statutory  deadline.  
     Watters  extended  Sanders  by  applying  the  same  approach  
to   the   60-­‐‑day   limit   for   seeking   intra-­‐‑agency   review   by   an  
ALJ.   656   F.2d   at   239.   It   attributed   this   time   limit   to   §405(g)  
itself,   apparently   not   appreciating   that   the   60-­‐‑day   time   for  
seeking   review   by   an   ALJ   was   created   by   regulation   rather  
than   statute—and   that   the   regulation   allows   more   time   for  
good   cause.   A   court   ought   not   assume   that   good   cause   is  
missing,  and  that  judicial  review  would  frustrate  the  regula-­‐‑
tion,  when  the  existence  of  good  cause  is  the  very  issue  the  
claimant   seeks   to   present.   A   district   court’s   decision   that  
good   cause   for   an   extension   exists   (or   doesn’t)   is   subject   to  
appellate   review.   See   Pioneer   Investment   Services   Co.   v.  
Brunswick   Associates   LP,   507   U.S.   380   (1993).   Judicial   review  
of   an   ALJ’s   decision   about   good   cause   no   more   defeats   the  
normal  time  limit  than  appellate  review  of  a  district  court’s  
decision  about  good  cause  defeats  the  normal  time  limit.  
   When   discussing   Salfi   and   Eldridge,   the   panel   in   Watters  
observed   that   those   claimants   had   presented   constitutional  
8                                                                  No.  13-­‐‑1252  

arguments,   which   in   the   panel’s   view   justified   judicial   re-­‐‑
view   even   when   claims   arising   under   statutes   and   regula-­‐‑
tions  are  unreviewable.  656  F.2d  at  240.  Yet  the  panel  did  not  
explain   what   this   has   to   do   with   the   meaning   of   the   word  
“hearing”,   which   concerns   the   agency’s   procedure   rather  
than   the   nature   of   the   legal   argument   by   which   a   claimant  
seeks   to   upset   the   administrative   decision.   Sanders   made   a  
similar   observation   in   passing—likewise   without   linking   it  
to  the  meaning  of  “hearing”.  430  U.S.  at  109.  But  unlike  Wat-­‐‑
ters,   Sanders   limited   to   one   the   opportunities   for   judicial   re-­‐‑
view,  rather  than  eliminating  even  the  initial  opportunity.  
     Eldridge  distinguished  between  the  need  for  the  presenta-­‐‑
tion  of  a  claim  to  the  agency,  which  it  held  to  be  jurisdiction-­‐‑
al,  and  the  need  for  exhaustion  of  the  administrative  process,  
which   it   thought   to   be   non-­‐‑jurisdictional.   The   dispute   in  
Watters,   as   in   this   case,   concerns   whether   the   claimant   ex-­‐‑
hausted   those   procedures   by   filing   a   timely   request   for   re-­‐‑
view:   the   claimant   says   yes   (when   “good   cause”   is   consid-­‐‑
ered),  and  the  agency  says  no.  If,  as  Salfi  and  Eldridge  estab-­‐‑
lish,  the  only  jurisdictional  element  of  §405(g)  is  the  need  for  
a   formal   administrative   claim,   then   the   court   has   subject-­‐‑
matter  jurisdiction  to  resolve  the  parties’  controversy.  
     Making   jurisdiction   turn   on   the   presence   of   a   constitu-­‐‑
tional  argument  not  only  lacks  support  in  the  text  of  §405(g)  
but  also  would  lead  claimants  to  present  unnecessary  consti-­‐‑
tutional  arguments.  Boley  has  done  just  that,  perhaps  in  re-­‐‑
sponse   to   the   observations   in   Watters.   Boley   contends   that  
the  Due  Process  Clause  requires  an  oral  hearing  on  her  con-­‐‑
tention   that   her   medical   condition,   and   the   agency’s   failure  
to   send   its   decision   to   her   lawyer,   jointly   establish   “good  
cause”  for  a  belated  petition  for  administrative  review.  Boley  
No.  13-­‐‑1252                                                                      9  

also   appears   to   contend   that,   as   a   substantive   matter,   the  
Constitution  requires  the  agency  to  find  that  good  cause  ex-­‐‑
ists  and  to  ensure  that  claimants’  lawyers  receive  notice.  Yet  
it  is  an  important  principle  that  courts  never  start  with  con-­‐‑
stitutional  arguments.  See,  e.g.,  New  York  City  Transit  Author-­‐‑
ity  v.  Beazer,  440  U.S.  568,  582  (1979).  
     The   first   question   in   a   case   such   as   this   ought   to   be   the  
meaning  of  “good  cause”  in  the  regulation.  If  there  is  a  ma-­‐‑
terial  dispute  of  fact,  the  need  for  an  oral  hearing  should  be  
derived   from   the   Administrative   Procedure   Act,   not   from  
the  Constitution.  See  generally  Rehman  v.  Gonzales,  441  F.3d  
506  (7th  Cir.  2006)  (a  genuine  issue  about  due  process  is  pre-­‐‑
sented  only  if  the  statute  and  regulations  fail  to  provide  no-­‐‑
tice  and  an  opportunity  for  a  hearing).  Reading  “hearing”  in  
§405(g)   in   a   way   that   forces   courts   to   resolve   constitutional  
questions   unnecessarily,   while   bypassing   statutes,   regula-­‐‑
tions,  and  principles  of  administrative  law  that  might  suffice  
to   decide   the   case,   has   nothing   to   recommend   it—and   if  
Congress  set  out  to  force  the  judiciary  to  render  unnecessary  
constitutional  decisions,  the  language  of  §405(g)  would  be  an  
odd  way  to  do  so.  
    We  conclude  that  Watters  is  wrongly  decided.  We  recog-­‐‑
nize   that   there   is   an   established   conflict   on   this   issue,   with  
McNatt  and  Shrader  favoring  Boley  and  a  greater  number  of  
circuits,   including   Rios   (see   page   3   above)   and   the   panel   in  
Watters,  the  other  way.  Watters  relied  on  Ortego  v.  Weinberger,  
516  F.2d  1005,  1007–08  (5th  Cir.  1975),  and  Cappadora  v.  Cele-­‐‑
brezze,  356  F.2d  1,  4  (2d  Cir.  1966).  Cappadora  long  preceded  
both  Salfi  and  Eldridge;  Ortega  came  between  those  cases  and  
did   not   discuss   Salfi   other   than   to   observe   that   28   U.S.C.  
§1331   does   not   supply   jurisdiction   in   Social   Security   cases.  
10                                                                 No.  13-­‐‑1252  

Yet   neither   the   Second   Circuit   nor   the   Fifth   Circuit   has  
changed   course   after   Eldridge.   The   Sixth   and   Tenth   Circuits  
have  adopted  the  same  view,  see  Hilmes  v.  Secretary  of  HHS,  
983   F.2d   67   (6th   Cir.   1993);   White   v.   Schweiker,   725   F.2d   91  
(10th  Cir.  1984).  The  Third  Circuit  has  held  that  constitution-­‐‑
al   arguments,   but   not   others,   can   be   entertained   when   the  
agency   does   not   hold   an   oral   hearing.   Penner   v.   Schweiker,  
701  F.2d  256,  260  (3d  Cir.  1983).  
   The  prospect  of  moving  from  one  side  of  a  conflict  to  an-­‐‑
other  is  not  attractive,  especially  when  the  conflict  is  so  old  
and   the   Supreme   Court   has   been   content   to   allow   the   disa-­‐‑
greement  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.  
      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.  
