Ramsey v. Commissioner of Social Security, 973 F.3d 537 (2020)

Facts

  • Joyce Ramsey and several other Social Security disability claimants (Joseph Fortin, Michael Shoops, Michael Harris, Theresa Flack, and Daniel Hutchins) were denied benefits after hearings before administrative law judges (ALJs).
  • At the time of the claimants’ hearings, the ALJs had not been appointed by the President, a court of law, or the Commissioner of Social Security.
  • The claimants sought judicial review in federal district court after the agency denied benefits, and they raised Appointments Clause objections for the first time in court.
  • The litigation followed Lucia v. SEC, where the Supreme Court held that SEC ALJs were “Officers of the United States” who must be appointed in the manner the Appointments Clause requires, and ordered a new hearing before a different, properly appointed ALJ.
  • The Commissioner conceded that Social Security statutes and regulations do not impose an issue-exhaustion requirement requiring claimants to raise particular legal objections during agency proceedings.
  • Even so, the Commissioner argued that the claimants forfeited their Appointments Clause challenges by failing to present them to the ALJs (or earlier in the administrative process).
  • The district courts affirmed the Commissioner’s denials of benefits.
  • The claimants appealed, and the Sixth Circuit consolidated the appeals to decide whether an Appointments Clause challenge is barred when first raised in federal court.

Issues

  1. Whether Social Security claimants forfeit an Appointments Clause challenge by failing to raise it during administrative proceedings before the Social Security Administration.

Decision

  • The Sixth Circuit held that the claimants did not forfeit their Appointments Clause challenges by failing to raise them before the agency.
  • The court reversed the district courts’ judgments.
  • The court remanded under sentence four of 42 U.S.C. § 405(g) for new hearings before different, properly appointed ALJs.

Legal Principles

  • When neither statute nor regulation requires issue exhaustion, courts are reluctant to impose a judge-made issue-exhaustion rule in Social Security adjudications, which are generally non-adversarial in character. (Sims v. Apfel).
  • Appointments Clause objections may be considered on judicial review even if not raised before an SSA ALJ, because requiring lay claimants to present such constitutional objections during inquisitorial agency hearings does not materially serve the usual aims of exhaustion.
  • For an Appointments Clause appointment defect, the ordinary remedy is a new hearing before a different, constitutionally appointed adjudicator. (Lucia v. SEC).
  • A sentence-four remand under 42 U.S.C. § 405(g) is an appropriate disposition when reversing an adverse benefits decision for legal error and ordering further administrative proceedings.

Conclusion

In Ramsey v. Commissioner of Social Security, the Sixth Circuit ruled that Social Security claimants who first assert an Appointments Clause challenge in federal court are not barred on forfeiture grounds where the agency’s scheme contains no statutory or regulatory issue-exhaustion requirement and the proceedings are non-adversarial; the court reversed the district courts and remanded for new hearings before different, properly appointed ALJs.