MACON, ON BEHALF OF GRIFFIN v. SULLIVAN, 929 F.2d 1524 (11th Cir. 1991)

MARY E. MACON, ON BEHALF OF WANDA GRIFFIN AND RAYMOND MACON, PLAINTIFF-APPELLANT, v. LOUIS SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE.

Nos. 90-3007, 90-3300.United States Court of Appeals, Eleventh Circuit.
April 11, 1991.

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Lester C. Wisotsky, Greater Orlando Area Legal Services, Inc., Orlando, Fla., for plaintiff-appellant.

Kendell W. Wherry, Asst. U.S. Atty., Orlando, Fla., Stanley Ericsson, Dept. of Health and Human Services, Office of the Gen. Counsel, Social Sec. Div., Baltimore, Md., for defendant-appellee.

Appeals from the United States District Court for the Middle District of Florida.

Before KRAVITCH and ANDERSON, Circuit Judges, and ATKINS[*] , Senior District Judge.

ANDERSON, Circuit Judge:

[1] On behalf of her two illegitimate children, appellant Mary E. Macon appeals the denial of subject matter jurisdiction under 42 U.S.C. § 405(g) and 28 U.S.C. § 1361. Macon’s complaint seeks review of the final decision of the Secretary of Health and Human Services denying surviving child’s insurance benefits under the Social Security account of Billie L. Griffin, the deceased wage earner. The district court rejected jurisdiction under both § 405(g) and § 1361. We reverse the district court’s denial of jurisdiction under 42 U.S.C. § 405(g), and therefore we decline to address the issue of mandamus jurisdiction under 28 U.S.C. § 1361.

[2] I. BACKGROUND[3] A. Statutory Background
[4] Title II of the Social Security Act requires that for an applicant to receive child’s insurance benefits, he must be a “child” of the insured individual and must have been “dependent” on the insured at the time of the insured’s death. See 42 U.S.C. § 402(d)(1)(C). A legitimate child, if unmarried and under a specified age, automatically qualifies as a “child” and as “dependent.” See 42 U.S.C. § 402(d)(1) and 402(d)(3). In a related case, the District Court of the Northern District of Illinois aptly summarized the “child” and “dependency” requirements for illegitimate children as follows:

Under the Act, an illegitimate child can prove his or her “child” status through one of three methods. The first method, set forth in 42 U.S.C. § 416(h)(2)(A), requires the applicant to prove that the applicant would have the same status as a child regarding the devolution of intestate personal property under the relevant state law. According to the second method, outlined in 42 U.S.C. § 416(h)(2)(B), a biological child of a technically invalid marriage can in certain circumstances be deemed a “child.” Finally, an applicant can under 42 U.S.C. § 416(h)(3) meet the “child” requirement if certain documentation or evidence is proffered.

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For those who establish their “child” status pursuant to either the second or third method, the Act deems them to be dependent. 42 U.S.C. § 402(d)(3). The Act is silent as to whether illegitimate children who acquire “child” status through the first method must submit actual proof of dependency.

[5] Brady v. Bowen, No. 85-C-5544 at 3 (N.D. Ill. September 2, 1988). [6] In 1976, the Supreme Court decided that an applicant who acquires “child” status under the first method of qualification — i.e. by virtue of state intestacy laws pursuant to 42 U.S.C. § 416(h)(2)(A) [1] the “inheritance method” — is also to be considered legitimate, and thus dependent under 42 U.S.C. § 402(d)(3)(A). See Mathews v. Lucas, 427 U.S. 495, 499 n. 2 and 514 n. 17, 96 S.Ct. 2755, 2759 n. 2 and 2766-67 n. 17, 49 L.Ed.2d 651 (1976). In other words, an applicant with child status under 42 U.S.C. § 416(h)(2)(A) does not have to meet a separate requirement of dependency in order to be eligible for child’s insurance benefits. [7] B. Boatman v. Schweiker
[8] The Secretary of the Department of Health and Human Services (“Secretary”), however, failed to implement the Supreme Court’s holding in Lucas. In 1981, Ruth Boatman, on behalf of a class of plaintiffs, including Macon, sued the Secretary in the Northern District of Illinois, claiming that in light of the Supreme Court’s holding, the Secretary was using improper guidelines in denying surviving child insurance benefits to illegitimate children under Title II of the Social Security Act. [9] On October 7, 1981, the parties entered into an Agreed Order (“Boatman Agreed Order”), effectively settling and dismissing the case. Boatman v. Schweiker, No. 78-C-299 (N.D.Ill. October 7, 1981). The Agreed Order implemented the Social Security Administration’s new policy, “effective June 29, 1976, that a child claimant who can inherit intestate personal property under the law of the State of the wage earner’s domicile is a deemed dependent upon the wage earner and is eligible for benefits.”Boatman Agreed Order ¶ 1. The Secretary thereby agreed to amend its Claims Manual so that applicants who meet the definition of “child” under § 416(h)(2)(A) would also be deemed “dependent” and thus be eligible for benefits under the Social Security Act.[2]
Furthermore, the Secretary agreed that “[a]dministrative res judicata will not be applied to bar any claim by an illegitimate child ever denied benefits pursuant to the dependency requirement of former Claims Manual § 2418.” Boatman Agreed Order ¶ 7(c).[3]

[10] II. CURRENT PROCEEDINGS[11] A. Administrative Proceedings
[12] Appellant Mary E. Macon filed three applications, in 1977, 1980, and 1984, for surviving

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child’s insurance benefits under Title II of the Social Security Act on behalf of her illegitimate children, Wanda Griffin and Raymond Macon.[4] The Secretary denied the March 1, 1977 application because “a requirement of the social security law [was] not met,” — i.e., “the father must have acknowledged the child in writing, or have been ordered by the court to contribute to the child’s support or have been judicially decreed to be the child’s father, or have been otherwise established as the child’s father and was living with the child or contributing to this support.” Social Security Notices of Disapproved Claims to Mary E. Macon for Wanda Griffin and Raymond Macon (May 31, 1977) [R1-27-Exhibits]. The parties agree that the Secretary’s notice of rejection paraphrases a portion of 42 U.S.C. § 416(h)(3).[5] The language of the notice of rejection clearly indicates that the denial was based on the failure to demonstrate only one of the three methods by which an illegitimate child can prove his or her “child” status. Specifically, the notice of rejection based the denial on the failure to establish child status under 42 U.S.C. § 416(h)(3). The significant fact for this case is that the notice of rejection was not based on a failure to demonstrate qualification under the inheritance method (i.e., 42 U.S.C. § 416(h)(2)(A)). The notice of rejection expressly states that benefits were denied because a requirement was not met, and that requirement was identified as the § 416(h)(3) method.[6]

[13] Macon did not file for reconsideration of her first application, but she attempted to reopen the 1977 application on February 29, 1980.[7] After the Secretary denied this second application initially and upon reconsideration, the administrative law judge (ALJ) dismissed Macon’s request for a hearing on the merits on the basis of administrative res judicata.[8] The Appeals

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Council initially denied review of this dismissal on January 22, 1982.[9] Upon reexamination, the Appeals Council concluded that the applicants did not have inheritance rights under Florida law, i.e., that the applicants failed to meet the definition of “child” under 42 U.S.C. § 416(h)(2)(A).[10]

[14] B. Judicial Proceedings
[15] On March 22, 1982, Macon filed a complaint against the Secretary in the Middle District of Florida, seeking judicial review of the Appeals Council’s denial of her second application for benefits pursuant to 42 U.S.C. § 405(g).[11] Macon asked the court to review the Secretary’s determination and award child’s insurance benefits on behalf of Wanda Griffin and Raymond Macon, or, in the alternative, to remand the case to the Secretary for a de novo rehearing. She amended her complaint on November 8, 1982, adding a demand that the Boatman Agreed Order be implemented, and adding 28 U.S.C. § 1361 (mandamus) as an additional jurisdictional basis. [16] In its decision of April 15, 1983, the district court found no jurisdiction under § 405(g) to review either the 1977 or 1980 application denials, but the court retained mandamus jurisdiction under 28 U.S.C. § 1361. Much later,[12] on December 1, 1989, the district court entered an order dismissing the case for lack of jurisdiction under either statute.[13] Macon v. Schweiker,
No. 82-148-ORL-CIV-R (April 13, 1983). The court held that it did not have § 405(g) jurisdiction because “the action of the Secretary with respect to the second application was a decision not to reopen a previously denied application and is, therefore, not a `final decision’ for purposes of § 405(g).”[14]

[17] III. DISCUSSION
[18] On appeal, Macon asserts jurisdiction under 42 U.S.C. § 405(g) and also under

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28 U.S.C. § 1361. We conclude that the district court has jurisdiction under § 405(g). Therefore, we decline to address the issue of mandamus jurisdiction under § 1361.

[19] A. Jurisdiction under 42 U.S.C. § 405(g)
[20] We find that the district court has jurisdiction of Macon’s appeal from the Secretary’s denial of her 1980 application under 42 U.S.C. § 405(g) because of the Appeals Council’s reexamination of the case pursuant to the Boatman Agreed Order. See
Memorandum dated October 25, 1982.[15] The Secretary conceded in oral argument to this court that the Appeals Council reexamined this case pursuant to the Boatman Agreed Order. This concession is confirmed by the Secretary’s position throughout these proceedings. See Supplemental Letter Brief from Stanley Ericsson to this court (October 31, 1990); Stanley Ericsson’s “Report in Response to Order Filed July 17, 1987” at 4, ¶ 6 (October 7, 1987) [R1-38-4]; Memorandum dated October 25, 1982. [21] The Boatman reexamination in this case constitutes a consideration of the merits of the case and thus constitutes a reopening. As represented by the Secretary, “[t]he Appeals Council examined this case again, in light of the Boatman
settlement, and concluded that the above-named children would not have inheritance rights under the laws of the state of Florida.” Memorandum dated October 25, 1982.[16] The language of the Secretary’s memorandum clearly indicates that the reexamination considered the merits of the issue of whether the children had “inheritance rights under the laws of the state of Florida.” Thus, the reexamination applied the inheritance method to the facts of this case.[17] It is clear that the application of the inheritance method constituted a consideration of the merits of the case. [22] The law is well established that judicial review under § 405(g) is available when a social security claim is in fact reopened and reconsidered on the merits to any extent at any administrative level. Graham v. Bowen, 786 F.2d 1113, 1114 (11th Cir. 1986) Cherry v. Heckler, 760 F.2d 1186, 1190 (11th Cir. 1985) (quotin McGowen v. Harris, 666 F.2d 60, 65-66 (4th Cir. 1981) (holding that a social security claim is subject to judicial review if it was reopened and reconsidered “on the merits to any extent and at any administrative level”). Because Macon’s claim was reconsidered on the merits at the Appeals Council level, the district court has § 405(g) jurisdiction. [23] In light of the district court’s § 405(g) jurisdiction, we remand this case for a review of the Secretary’s denial of Macon’s 1980 application. The review shall include, inter alia,
whether the Appeals Council correctly applied the Florida intestacy laws to the facts of this case and whether the Secretary’s Boatman reexamination complied with the Boatman
Agreed Order. Should the district court conclude that th Boatman reexamination did not comply with the Agreed Order, it may be necessary for the district court to remand this case to the Secretary for proper reexamination.[18] [24] Because we hold that the district court has jurisdiction of this case pursuant to § 405(g), we need not address Macon’s alternative argument in support of jurisdiction,

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i.e., mandamus under 28 U.S.C. § 1361.

[25] B. Judicial Res Judicata
[26] The Secretary also argues that this claim is barred, in any event, by judicial res judicata. Specifically, the Secretary contends that Boatman v. Bowen, No. 78-C-299, 1988 WL 6957 (N.D.Ill. January 25, 1988), and Brady v. Bowen, No. 85-C-5544 (N.D. Ill. September 2, 1988), two cases in which Macon participated as a party plaintiff, bar Macon’s claims. The Secretary has failed to persuade us that either case operates as judicial res judicata to the instant case. [27] 1. Boatman v. Bowen
[28] On December 5, 1985, Mary Macon Ward, Wanda D. Griffin, and Raymond L. Macon were among the plaintiffs who moved in the District Court of the Northern District of Illinois to “enforce the obligations imposed upon the Secretary of the United States Department of Health and Human Services … by the [Boatman] Agreed Order.” Boatman v. Heckler, No. 78-C-299, Motion for Relief From Order of Dismissal to Permit Enforcement of Agreed Order at 1 [R2-51-Exhibit 1]. The Illinois court characterized this action as a civil contempt proceeding against the Secretary. It denied plaintiffs’ motions, concluding that the Secretary was not in civil contempt because the Boatman Agreed Order was not “an operative command capable of enforcement” unde International Longshoremen’s Ass’n, Local 1291 v. Philadelphia Marine Trade Ass’n, 389 U.S. 64, 74, 88 S.Ct. 201, 206, 19 L.Ed.2d 236 (1967). Boatman v. Bowen, No. 78-C-299 at 6-7 (N.D.Ill. January 25, 1988).[19] [29] The proceedings in the instant case do not seek a civil contempt remedy against the Secretary. Rather, Macon seeks implementation of the Boatman Agreed Order with respect to her individual application for child’s insurance benefits. Th Boatman Agreed Order expressly contemplates that claims like the instant one will be handled as part of the routine disposition of individual applications.[20] Thus, we conclude that the Boatman proceedings would not have been the appropriate forum to litigate the instant claim for implementation of the Boatman Agreed Order, that the instant claim was not in fact litigated there, and that the resolution o Boatman v. Bowen does not bar this action under the principles of res judicata. Moreover, the subsequent Brady opinion by the same district judge, discussed infra, makes it clear that future petitions to enforce the Boatman Agreed Order are not barred by res judicata. [30] 2. Brady v. Bowen
[31] In June, 1987, Macon moved to join as a named plaintiff in the lawsuit of Brady v. Bowen, No. 85-C-5544 (N.D.Ill. September 2, 1988). The Brady case arose when the SSA sent Peggy Brady a notification that her case had been reexamined pursuant t Boatman and denied. The SSA’s notice of denial was required by ¶ 8 of the Boatman Agreed Order. The plaintiffs in that case sought judicial review of the Secretary’s denial of Peggy Brady’s claim on behalf of Kennith Brady, and, in addition, they sought classwide relief to enforce the Boatman Agreed Order.[21] The Illinois district court found that the Boatman court had intended to retain jurisdiction over enforcement of the Boatman
Agreed Order. Brady v. Bowen, No. 85-C-5544 at 8-9 (N.D.Ill. September 2, 1988). Therefore, the court held that Brady’s suit to enforce the Boatman Agreed Order was

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more appropriately brought in the Boatman proceeding itself.

[32] The administrative posture of the Brady case distinguishes that case from the instant case. On the date of the Boatman
Agreed Order in October, 1981, the Secretary’s denial of Brady’s application for benefits was no longer pending. Brady had failed to seek timely review from the Appeals Council on her first application, and the Secretary denied a subsequent application on October 22, 1980. Brady sought judicial review only after a July 21, 1982 notification pursuant to ¶ 8 of the Agreed Order. Because Brady had no routine application pending at the time of the Boatman Agreed Order on October 7, 1981, and also because Brady’s petition in district court sought classwide relief, Brady’s petition did not satisfy the portion of ¶ 9 of the Agreed Order that is applicable to individuals whose claims were no longer pending on the date of the Agreed Order:

The certification of the class will not limit the appeal rights of individual class members who have such rights under paragraph 8 of this decree if those rights are asserted in a timely manner on behalf of that individual and no others. (emphasis added).

[33] Boatman Agreed Order ¶ 9. [34] By contrast, Macon’s 1980 application for benefits was still pending at the time of the Agreed Order, and the Appeals Council did not deny her application until a month after the Agreed Order had been issued. Under the provision of ¶ 9 of the Boatman
Agreed Order that is applicable to individual with claims pending at the time of the Agreed Order, Macon is entitled to an individual judicial appeal:

The certification of this class will also not affect the appeal rights (1) of individuals who have pursued their appeals in a timely manner and currently have an appeal pending at the reconsideration, hearing, or Appeals Council levels. . . .

[35] Boatman Agreed Order ¶ 9. Therefore, Macon’s case is distinguishable from Brady v. Bowen, and the Illinois court’s resolution of Brady does not control the instant action. [36] Moreover, the Brady court expressly held that Brady and other class members could petition the Boatman court for enforcement of the Boatman Agreed Order. Thus, it is clear that Brady
does not constitute res judicata with respect to such enforcement proceedings, and a fortiori would not constitut res judicata with respect to a proceeding like the instant case which seeks implementation of the Boatman Agreed Order in a pending routine application by an individual as contemplated in ¶ 9 of the Boatman Agreed Order.[22] [37] For the foregoing reasons, we conclude that the instant action is not barred by judicial res judicata. [38] C. Implementation of the Boatman Order
[39] Because we hold that the district court does have jurisdiction under § 405(g) to review the denial of Macon’s 1980 application, we need not address Macon’s alternative argument that the district court had mandamus jurisdiction pursuant to § 1361. In light of the unreasonable delays that have already been encountered in this case, however, judicial economy indicates that we do decide an issue related to the Secretary’s challenge to the district court’s mandamus jurisdiction. The Secretary’s primary argument against mandamus jurisdiction was that an adequate alternative remedy exists for Macon in the Boatman
proceedings in the Northern District of Illinois. Because the Secretary presented this argument so forcefully, both in the district court and on appeal, we construe the argument as a request to transfer the case to the Boatman court in Illinois pursuant to the change of venue provisions of 28 U.S.C. § 1404. [40] We conclude that such a transfer would be inappropriate. Paragraph 9 of the

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Boatman Agreed Order specifically contemplates that implementation of the Agreed Order will take place as part of the individual appeal of any persons who had applications pending either at the reconsideration level, the hearing level, or the Appeals Council level at the time of the Agreed Order on October 7, 1981. As we have already noted, Macon’s application was pending in the Appeals Council at that time. Thus, it is clear that the Boatman Agreed Order contemplates that the appropriate forum for the instant claim is the Florida district court to which we remand this case.[23]

[41] For the foregoing reasons, we reverse the district court’s denial of jurisdiction under 42 U.S.C. § 405(g) and remand for further proceedings consistent with this opinion. In light of our holding regarding § 405(g) jurisdiction, we do not reach the issue of jurisdiction under 28 U.S.C. § 1361. [42] REVERSED and REMANDED.