## Facts

- The Second Circuit had previously held that, in disability cases, a claimant’s treating physician’s medical opinion was binding on the Social Security Administration (SSA) unless substantial evidence contradicted it (the treating-physician rule).
- After those Second Circuit decisions, the SSA declined to treat the rule as mandatory in all cases arising in the circuit and instead used internal guidelines stating that treating-source opinions would receive “increased weight,” without stating that such opinions were binding absent substantial contrary evidence.
- Plaintiffs, including Pauline Stieberger and a certified class of disability claimants, alleged that SSA adjudicators and reviewers denied or terminated benefits in Second Circuit cases after discounting treating-physician opinions in a manner inconsistent with circuit precedent.
- The United States District Court for the Southern District of New York entered a broad preliminary injunction that, among other things, barred the SSA from denying or terminating disability benefits in a way that conflicted with Second Circuit decisions.
- The injunction also directed the SSA to revoke internal guidelines that conflicted with Second Circuit decisions and to notify SSA employees of Second Circuit precedent on the treating-physician rule.
- The district court concluded it had jurisdiction under 42 U.S.C. § 405(g), found grounds to excuse exhaustion for the class, and treated the 60-day filing period as subject to equitable tolling in the circumstances presented.
- After the district court entered the injunction, the Second Circuit decided another case requiring the SSA to draft instructions to adjudicators explaining how to apply the treating-physician rule and making clear that the rule was mandatory in Second Circuit cases.
- The Secretary of Health and Human Services appealed, challenging the district court’s authority to issue class-wide preliminary relief and the breadth and specificity of the injunction.

## Issues

1. Whether the district court had authority (including under 42 U.S.C. § 405(g), and related doctrines such as waiver of exhaustion and equitable tolling) to entertain a class action challenging SSA’s practice of not treating Second Circuit precedent as binding in disability adjudications.
2. Whether a preliminary injunction requiring the SSA to bring its guidance and adjudications into line with Second Circuit treating-physician precedent was proper, and whether the injunction’s terms were overly broad or insufficiently specific under Rule 65.

## Decision

- The Second Circuit agreed that, within the Second Circuit, the SSA must treat controlling Second Circuit decisions—including the treating-physician rule—as binding in the adjudication of disability claims.
- The court upheld the district court’s power to grant preliminary, class-wide relief directed at an agency policy that predictably produced decisions contrary to binding circuit law, and it accepted the district court’s use of § 405(g) as a basis for jurisdiction in this posture.
- The court also accepted, on the record before it, the district court’s decision to excuse exhaustion requirements for the class and to permit relief despite timing obstacles where the challenged agency practice would make ordinary administrative review ineffective for addressing the claim presented.
- At the same time, the Second Circuit modified aspects of the injunction to narrow and clarify the relief, so that it was tied to identified Second Circuit precedents and stated with the specificity required for injunctions, rather than operating as an open-ended directive over SSA operations.

## Legal Principles

- A federal agency adjudicating cases within a circuit must treat that circuit’s precedents as binding law for those cases; it may not treat adverse circuit decisions as controlling only in the individual litigated matter.
- Where plaintiffs challenge an agency policy that affects the manner in which claims are decided across many cases, review may be available under 42 U.S.C. § 405(g) even though the suit is not a standard appeal from a single benefits denial.
- Courts may excuse administrative exhaustion for a class where the claim is collateral to individual entitlement, further administrative review would likely be futile on the legal question presented, and delaying review risks serious harm to claimants.
- The 60-day period in § 405(g) is not necessarily an absolute bar in all contexts; equitable tolling may be available where fairness requires it on the facts shown.
- In Second Circuit disability adjudications, a treating physician’s opinion is binding on the fact-finder unless contradicted by substantial evidence, and it also receives added weight because of the treating relationship.
- Injunctions must be stated with reasonable clarity and specificity; class-wide injunctive relief should be framed to correct conflict with identified binding law without becoming a general mandate to supervise individual adjudications.

## Conclusion

Stieberger v. Bowen held that the SSA must apply Second Circuit disability precedent, including the treating-physician rule, in cases arising within the circuit, and it sustained the district court’s use of preliminary, class-wide injunctive relief to address the SSA’s refusal to treat that precedent as binding, while modifying the injunction to limit and clarify its terms.


Stieberger v. Bowen, 801 F.2d 29 (1986)