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Duffany v. Berryhill

United States District Court, D. Massachusetts

September 15, 2017

NANCY A. BERRYHILL, [1] Acting Commissioner of Social Security, Defendant.


          Indira Talwani, United States District Judge

         I. Introduction

         Plaintiff Joseph Duffany (“Duffany”) seeks judicial review of a final decision by the Acting Commissioner of Social Security Nancy Berryhill (“Commissioner”) denying Duffany's Title II application for Disability Insurance Benefits (“DIB”) and Title XVI application for Supplemental Security Income (“SSI”). Mot. to Reverse [#14]. The Commissioner has filed a Motion for Order Affirming the Decision of the Commissioner [#20] [hereinafter “Mot. to Affirm”]. Both parties submitted additional papers. Pl.'s Reply Mem. [#22] [hereinafter “Pl.s' Rep.”]; Def.'s Sur-Reply [#23].

         For the following reasons, both motions are ALLOWED IN PART. This matter is REMANDED for further consideration consistent with this order. The Commissioner's decision is otherwise AFFIRMED.

         II. Background and Procedural History

         Neither party contests the procedural history as recounted in the opinion under review, summarized as follows.[2]

         A. Prior Proceedings

         Prior to the application at issue in the present appeal, Duffany filed two sets of applications for Disability Insurance Benefits (Title II) and Supplemental Security Income (Title XVI) alleging a disability beginning on July 9, 2011. (R. 166-167).

         The first set of applications were filed on October 5, 2011, and were denied on December 5, 2011. (R. 166). There was no appeal.

         The second set of applications were filed on March 26, 2012, and were denied on August 10, 2012. (R. 166). Duffany sought reconsideration, and the applications were again denied on February 21, 2013 (hereinafter, the “February 2013 Denial”). (R. 167). There was no further appeal.

         B. Current Proceedings

         Duffany filed a third set of applications on July 9, 2013. (R. 167). The applications were denied on August 19, 2013, and again upon reconsideration on January 27, 2014. (R. 167).

         Duffany requested a hearing, and the Administrative Law Judge (“ALJ”) held a video hearing on May 21, 2015, and rendered a decision on June 26, 2015. (R. 163-184). Despite noticing and holding a hearing, the ALJ's decision stated that the request for a hearing as to the application for Disability Insurance Benefits was dismissed. (R. 168). The ALJ also denied the application for Social Security Income, finding Duffany not disabled. The Appeals Council declined to review either the ALJ's “dismissal action or the decision” on July 22, 2016, (R. 1-4), and Duffany timely commenced the instant action seeking review of the denial of the third set of applications.

         III. Disability Insurance Benefits

         A. The ALJ's Decision

         Disability Insurance Benefits are available only to claimants who become disabled while they are “insured.” 42 U.S.C. § 423(a)(1)(A). The ALJ found (and the parties do not dispute) that Duffany was last insured for Disability Insurance Benefits on December 31, 2012. (R. 166). The ALJ determined that the February 2013 Denial constituted a final decision. The ALJ further noted that, while Duffany was thus barred from recovering benefits for months prior to February 2013, he could recover Disability Insurance Benefits if he submitted new and material evidence establishing a continuous disability since on or before December 31, 2012, Duffany's last day insured. The ALJ determined, however, that Duffany presented no new evidence that was both unavailable at the previous determination and pertinent to the period (on or before December 31, 2012) during which Duffany was insured, which would have counseled against application of res judicata. (R. 168). The ALJ thus dismissed the request for a hearing on the Disability Insurance Benefits application as already having been adjudicated.

         B. Analysis

         Duffany principally contends that the ALJ's sua sponte application of res judicata, without notice, worked to provide less process than the Fifth Amendment guarantees. Mot. to Reverse [#14] 4-7. He contends that had he and his attorney been provided notice of the ALJ's potential application of res judicata, they could have mounted a defense, and that the ALJ failed to produce the file on which res judicata would rely. Id. Further, Duffany contends that the ALJ added exhibits to the file after the hearing, depriving Duffany the ability to examine and confront the full body of evidence on which the ALJ would render a decision. Id.

         The court has subject matter jurisdiction to review Duffany's claim based on the lack of notice to Duffany as to the potential application of res judicata. At bottom, persons are due meaningful notice of potential administrative deprivations of property. See Mathews v. Eldridge, 424 U.S. 319, 333 (1979). Here, neither the initial denial of Duffany's Disability Insurance Benefits application nor the denial upon reconsideration was based on application of res judicata, but on findings that Duffany was not sufficiently disabled. (R. 352-355) (initial denial); (R. 358-360) (denial upon reconsideration). Duffany sought and was afforded a hearing, and the Notice of Hearing also did not identify the potential application of res judicata, despite the mandate that the notice specify “issues to be decided” in the case. See 20 C.F.R. § 404.938; (R. 392-397).[3]

         At the hearing, where Duffany's attorney might have been able to present argument against application of res judicata, the ALJ still did not reference any potentially preclusive effect of the prior unfavorable decisions. (R. 210-252). The sua sponte application of res judicata in the ALJ's decision therefore appears violative of the letter and spirit of the Social Security regulations that effectuate Eldridge's required notice by indicating (i) that the issues before an ALJ at a hearing are those “brought out in the initial, reconsidered or revised determination that were not decided” in the claimant's favor (here: disability); (ii) that an ALJ “may consider a new issue at the hearing if he or she notifies” the claimant; and (iii) that the ALJ “shall notify” the claimant if the ALJ “will consider any new issue.” See 20 C.F.R. § 404.946 (emphasis added). In short: the regulations governing the ALJ promised Duffany notice which he was not given.

         The Commissioner attempts to distinguish two authorities cited by Duffany's counsel in favor of the above analysis. In Lindholm v. Astrue, 2012 WL 527856, at *8 (D. Mass. Feb. 16, 2012), the plaintiff objected to the issues listed in the Notice of Hearing. At the hearing, in response to these objections, the ALJ discussed the issues raised in the objections rather than set a new hearing with notice of intent to discuss those issues. Id. Plaintiff and her counsel were not prepared to discuss these issues, and asserted such to the ALJ. Id. The ALJ nonetheless continued on, resulting in the court finding that the plaintiff did not receive “full and fair opportunity to argue her case . . . .” Id. The Commissioner argues that this case is distinguishable because the ALJ did not switch topics unexpectedly at the hearing. But here, in switching topics after the hearing, without warning or opportunity for any rebuttal (even if unprepared rebuttal), the ALJ afforded Duffany and his counsel even less notice than was afforded the plaintiff in Lindholm.

         This same analysis attends Christensen v. Apfel, 1999 WL 33595519, at *5 (M.D. Fla. Nov. 5, 1999), where again the ALJ raised a new issue at the hearing without prior notice as required by 20 C.F.R. § 404.946. There, the court determined it was insufficient that the ALJ gave warning of dispositive issues contemporaneously with the opportunity to address them; here no notice was given at all.

         Finally, the court's decision in Harris v. Callahan, 11 F.Supp.2d 880, 884-85 (E.D. Tex. 1998)-which found failure to notice potential application of res judicata to demand a remand- is not sufficiently distinguished simply by dint of that plaintiff's pro se status. The requirements set forth at 20 C.F.R. § 404.946 do not distinguish between represented and pro se claimants, and the Harris ...

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