
USCA1 Opinion

	




          March 9, 1995                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ___________________          No.  93-2309                                    NORMA GILBERT,                                Plaintiff, Appellant,                                          v.              LOUIS W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES,                                 Defendant, Appellee.                                 ____________________                                     ERRATA SHEET               The opinion of this Court issued on March 6, 1995 is amended          as follows:               On Page 5, line 15, delete "see, e.g.,"                                           ___  ____               On Page 5, line 16, delete "see, e.g.,"                                           ___  ____               On Page 5, line 17, delete "see, e.g.,"                                           ___  ____               On  Page 6, lines 12-13,  delete "828 F.  Supp. 815 (D.Colo.          1993), aff'd,"                 _____                                                                   March 6, 1995                                [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                  ___________________          No. 93-2309                                                NORMA GILBERT,                                Plaintiff, Appellant,                                          v.              LOUIS W. SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES,                                 Defendant, Appellee.                                  __________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF RHODE ISLAND                     [Hon. Ernest C. Torres, U.S. District Judge]                                             ___________________                                 ___________________                                        Before                               Selya, Boudin and Stahl,                                   Circuit Judges.                                   ______________                                 ___________________               David B. Green on brief for appellant.               ______________               Edwin J. Gale, United  States Attorney, Stephanie S. Browne,               _____________                           ___________________          Assistant  United States  Attorney,  Randolph W.  Gaines,  Acting                                               ___________________          Deputy Chief Counsel for Social Security, A.  George Lowe, Deputy                                                    _______________          Chief Counsel for Social Security Disability Litigation, and Mary                                                                       ____          Ellen  Russell, Office  of the  General Counsel,  Social Security          ______________          Division, Department of  Health and Human Services,  on brief for          appellee.                                  __________________                                  __________________                 Per Curiam.   Claimant Norma  Gilbert appeals a district                 __________            court judgment affirming the  Secretary's refusal to reopen a            prior denial of social security disability benefits.                                          I                                          I                                          _                 In June  1990, Gilbert filed her  second application for            social security disability benefits and, after a hearing, was            found to have been disabled since April 30, 1984.  A November            1984 application had alleged the same impairment and the same            disability  onset date.  The 1984 claim was filed without the            assistance of counsel and Gilbert failed to pursue the denial            past   the  reconsideration   stage.     As  a   result,  the            reconsidered  denial became  the final  agency determination.            See 20 C.F.R.   404.921.   In 1990, Gilbert sought  to reopen            ___            the earlier  application.  Because  more than five  years had            elapsed  between  the  adverse  notification   on  the  first            application and  the filing  of the current  application, the            Administrative Law Judge (ALJ)  found no record indication of            fraud  or clear  error  under 20  C.F.R.    404.988(c)(1)  or            (c)(8) to  warrant reopening  the first determination,  which            was deemed administratively final.   Subsequently, the agency            limited Gilbert's retroactive benefits to June 1989, one year            preceding the second application. See  42 U.S.C.   423(b); 20                                              ___            C.F.R.   404.621(a)(1)(i).                 In district court, Gilbert complained that the Secretary            improperly refused  to pay disability benefits  from May 1984                                         -2-            to June 1989  and raised  a constitutional  challenge to  the            reopening refusal.   Claimant  also contended that  there had            been  a de  facto reopening  of the  1984 application.1   The                    __  _____            district court concluded  that the ALJ  had not reopened  the            prior determination and, without reaching  the constitutional            question, dismissed the complaint  for lack of subject matter            jurisdiction under the authority  of Califano v. Sanders, 430                                                 ________    _______            U.S. 99, 108 (1977).2  Gilbert's motion  for summary judgment            was also denied, and this appeal ensued.                 Our review of  a dismissal  for lack  of subject  matter            jurisdiction is  de novo.   See Shea  v. Rev-Lyn  Contracting                                        ___ ____     ____________________            Co.,  868 F.2d 515, 517 (1st Cir. 1989).  Reopening decisions            ___            are  a  matter of  agency  discretion and  generally  are not                                            ____________________            1.  Contrary to  claimant's assertions, however, there  is no            authority for a de  facto reopening "at any time"  absent the                            __  _____            narrow exceptions laid  out in   404.988(c)(1)-(c)(11).   The            Secretary's discretion  to reopen  cannot be extended  beyond            the  scope of the regulatory scheme, 20 C.F.R.   404.988, and            all reopenings,  whether express  or implied, are  subject to            those regulatory requirements.  Since claimant wholly  failed            to  identify any  fraud  or  clerical  error,  20  C.F.R.                404.988(c)(1),(c)(8),   in   connection   with    the   first            application, the Secretary lacked discretion to reopen and no            constructive reopening  could have  occurred.  See  Coates on                                                           ___  _________            behalf of Coates v. Bowen, 875 F.2d 97, 102 (7th Cir. 1989).            ________________    _____            2.  The Secretary's motion  to dismiss under Fed.  R. Civ. P.            12(b)(1)  included an affidavit  with relevant administrative            decisions  attached  as exhibits,  but  without the  complete            administrative  record.   We have  indicated before  that the            better  practice   is  the  routine  filing   of  the  entire            administrative record.  Torres v. Secretary  of HHS, 845 F.2d                                    ______    _________________            1136, 1137  n.1 (1st Cir.  1988).   Nonetheless, the  limited            record  before us  is  sufficient to  decide the  essentially            legal question presented here.                                          -3-            subject  to  judicial review,  but an  exception exists  if a            colorable  constitutional claim is  presented.   Sanders, 430                                                             _______            U.S. at  109; Dudley v. Secretary  of HHS, 816 F.2d  792, 795                          ______    _________________            (1st  Cir. 1987); Carver v.  Secretary of HHS,  869 F.2d 289,                              ______     ________________            292 (6th  Cir. 1989) ("[C]ourts have  consistently upheld the            imposition of the doctrine  of administrative res judicata in            social  security  cases   except  under  circumstances   that            implicate  a  colorable  constitutional  issue.").    Gilbert            argues that  the denial notices given when she was proceeding            pro  se  on  the  first  application   did  not  explain  the            ___  __            consequences of reapplying  for benefits rather  than seeking            further  administrative review,  and  therefore violated  her            procedural due process rights.3                 Gilbert relies  on Gonzalez v. Sullivan,  914 F.2d 1197,                                    ________    ________            1203  (9th Cir.  1990),  which held  that the  initial denial                                            ____________________            3.  Procedural  due process  in the  social  security context            requires  no  more than  an opportunity  to  be heard  "`at a            meaningful time  and in a  meaningful manner.'"   Mathews  v.                                                              _______            Eldridge,  424 U.S.  319,  333 (1976)  (quoting Armstrong  v.            ________                                        _________            Manzo, 380 U.S. 545, 552 (1965)).            _____                                         -4-            notice  Gonzalez  received   violated  due   process.4     In            pertinent part, the denial notice in Gonzalez informed:                                                 ________                 If you do not  request reconsideration of your case                 within the  prescribed time period, you  still have                 the right to file another application at any time.            Id.  The Gonzalez  court found  that  notice constitutionally            ___      ________            infirm because it failed to inform how to appeal a denial:                 [T]he form of the  notice used here is sufficiently                 misleading that it introduces  a high risk of error                 into the disability process. . . . The notice given                 in this  case does not clearly indicate  that if no                 request   for   reconsideration   is    made,   the                 determination  is  final.   We  conclude  that  the                 notice violates appellant's  fifth amendment  right                 to due process.            Id.              ___                 Other courts have recognized that the  particular notice            form  used in  Gonzalez poses  serious due  process concerns.                           ________            See, e.g.,  Day v.  Shalala, 23 F.3d 1052, 1065-66 (6th  Cir.            ___  ____   ___     _______            1994); Aponte  v. Sullivan,  823 F. Supp.  277, 282  (E.D.Pa.                   ______     ________            1993);  Christopher v. Secretary of  HHS, 702 F. Supp. 41, 43                    ___________    _________________            (N.D.N.Y. 1989);  Butland v.  Bowen,  673 F.  Supp. 638,  641                              _______     _____            (D.Mass. 1987); Aversa v. Secretary of HHS, 672 F. Supp. 775,                            ______    ________________            777  (D.N.J. 1987); Dealy v.  Heckler, 616 F.  Supp. 880, 887                                _____     _______                                            ____________________            4.  The  Gonzalez   decision  became   the  subject   of  the                     ________            Secretary's Acquiescence Ruling 92-7(9)  (published September            30, 1992).  According to the ruling, claimants who received a            Gonzalez notice before July  1, 1991 and did not  appeal, but            ________            subsequently filed another  application that either requested            a reopening of  the prior determination or  requested some or            all  of the  benefits then  claimed, were  entitled to  a new            determination  based on  the  merits of  their claim  without            regard  for  the usual  time  limits  imposed upon  reopening            requests.                                         -5-            (W.D.Mo. 1984);  see also  Burks-Marshall v. Shalala,  7 F.3d                             ___ ____  ______________    _______            1346, 1349 (8th Cir. 1993) (dictum).5                    Gilbert's  notice is  not  available, but  the Secretary            concedes that  it is substantially the same  as that rejected            in  Gonzalez.  As it is undisputed that claimant received the                ________            kind of Gonzalez notice that courts have uniformly recognized                    ________            as inadequate, we find that Gilbert has proffered a colorable            constitutional claim and the district  court had jurisdiction            to review the denial of reopening.                                            II                                          II                                          __                 The  Secretary  argues,  however,  that   Gilbert's  due            process  claim   is  not   colorable  because  she   has  not            demonstrated that she forfeited her right to appeal the prior            denial  in  reliance on  the notice.    The question  was not            discussed in  Gonzalez, but we  believe that reliance  on the                          ________            defective  notice is  a core  ingredient of  claimant's prima                                                                    _____            facie  showing of a  due process deprivation.   "Without such            _____            reliance,  the   injury  is  not  fairly   traceable  to  the            challenged  action."  Gilbert v. Shalala, __ F.3d __, 1995 WL                                  _______    _______            16762,  *2 (10th  Cir. Jan.  17, 1995).   Only  claimants who            detrimentally relied on an  inadequate notice could have been                                            ____________________            5.  In Gilbert  v. Shalala,  828 F.  Supp.  815, 816  (D.Colo                   _______     _______            1993), aff'd, __  F.3d __, 1995 WL 16762 (10th  Cir. Jan. 17,                   _____            1995), the  court reached a different  conclusion, but there,            the allegedly  deficient Gonzalez notice also  contained this                                     ________            language:  "A new application is not the same as an appeal of            this determination."                                          -6-            injured by it and were entitled to reopen their applications.            Day,  23 F.3d  at 1066;  see also  Burks-Marshall, 7  F.3d at            ___                      ___ ____  ______________            1349;  Delyria v.  Shalala, 856  F. Supp.  1432, 1443  (D.Or.                   _______     _______            1994);  Butland, 673 F.Supp. at  642; Dealy, 616  F. Supp. at                    _______                       _____            886; cf. Air Line Pilots  Ass'n v. Precision Valley Aviation,                 ___ ______________________    __________________________            Inc., 26 F.3d 220, 226 (1st Cir. 1994) (party invoking unique            ____            circumstances  exception to  untimely notice  of appeal  must            show  that  detrimental  reliance  on judicial  statement  or            action was objectively  reasonable); Jimenez-Nieves v. United                                                 ______________    ______            States, 682 F.2d 1,  4 (1st Cir. 1982)  (justifiable reliance            ______            upon  a representation--taking action or refraining from it--            is   an  essential   element   of  the   tort  of   negligent            misrepresentation).  Thus,  to succeed on  the merits of  her            constitutional claim,  Gilbert must  show that she  relied on            the flawed notice and was prejudiced.                     Day, 23  F.3d  at 1066,  assigned essentially  objective                 ___            criteria by which  to assess  whether or not  a claimant  had            established  injury   because  of  reliance   upon  erroneous            information:    those  claimants who  received  an inadequate            denial  notice, reapplied  (rather than  appealing the  prior            denial), and were met with either a res judicata defense or a                                                ___ ________            reduced award had detrimentally  relied on the faulty notice.            See id.  & n.17; see  also Delyria, 856 F.  Supp. at 1439-40.            ___ ___          ___  ____ _______            We  agree,  in the  circumstances  presented  here, that  the                                         -7-            detrimental reliance test  governs the showing claimant  must            make to succeed on her procedural due process claim.                 Parsing Day's formulation,  undisputed historical  facts                         ___            of record  support a finding of detrimental  reliance in this            case.   Gilbert  was  denied benefits  on  her prior  pro  se                                                                  ___  __            application; she  received an admittedly  defective Gonzalez-                                                                ________            type notice, and, acting in conformity with the notice, filed            a  new  application  requesting   a  reopening.    She  later            testified  that  she did  not know  how  to appeal  the prior            denial.  That  Gilbert did  not appeal but  instead chose  to            reapply for the  same benefits evidences her reliance  on the            Secretary's  erroneous  advice.     See  n.4,  supra.    Upon                                                ___        _____            redetermination,   Gilbert   received  retroactive   benefits            reduced  to one  year and  suffered the  loss of  almost five            years of benefits.  Since the record indicates  both reliance            on erroneous advice and  concomitant actual harm, we conclude            that the  Secretary's refusal to  reopen violated  claimant's            due process rights.                  If  the 1990  application  had  been  claimant's  first,            payment of  retroactive disability benefits would  clearly be            limited  to one year prior  to the application.   42 U.S.C.              423(b); 20 C.F.R.   404.621(a)(1); Crady v. Secretary of HHS,                                               _____    ________________            835 F.2d 617, 619-20 (6th Cir. 1987).  Since we conclude that            claimant has  interposed a meritorious  constitutional claim,            the procedural bar  to reopenings after four years is lifted,                                         -8-            and the relevant  application date  for retroactive  benefits            purposes would  be  the  onset  date  claimed  in  the  first            application.  See,  e.g., Ferguson v. Sullivan,  718 F. Supp.                          ___   ____  ________    ________            1269,  1271-72  (W.D.N.C.   1989)  (constitutional   interest            implicated   by  claimant's   mental  incapacity   to  pursue            administrative  appeal required  that disability  benefits be            calculated from previous application); see also Culbertson v.                                                   ___ ____ __________            Secretary  of  HHS,  859  F.2d 319,  322-24  (4th  Cir. 1988)            __________________            (similar).   The award of one year of retroactive benefits is            too skimpy and benefits must be calculated from the April 30,            1984 disability date.                                         -9-                                         III                                         III                                         ___                 Ordinarily,  having decided that  the district court had            jurisdiction to review the  reopening denial, we would remand            for further consideration below and not address the merits of            the case.   In the  distinctly unusual circumstances  of this            case,  where  the  record   is  for  all  practical  purposes            complete,  where the  Secretary's  concession  regarding  the            critical notice language is conclusive  as to the content  of            claimant's   notices,  and   where   Gilbert's  reliance   is            sufficiently evidenced in the record to  enable this court to            decide the  largely legal  question  whether the  Secretary's            reopening rules should be relaxed, a remand is not required.             See Guglietti v.  Secretary of  HHS, 900 F.2d  397, 399  (1st            ___ _________     _________________            Cir. 1990); see  also Young v. Bowen, 858 F.2d  951, 956 (4th                        ___  ____ _____    _____            Cir. 1988); King v. Commissioner, 458 F.2d 245, 249 (6th Cir.                        ____    ____________            1972).                 We   conclude    that    the   Secretary    could    not            constitutionally refuse to reopen Gilbert's first application            and  that   claimant  should  have  been  awarded  disability            benefits for  the  period commencing  April  30, 1984.    The            judgment  of the district court  is reversed and  the case is            remanded  with  instructions  to   return  the  case  to  the            Secretary for an award of  disability benefits from April 30,            1984.                 Reversed and remanded.                 ______________________                                         -10-
