## Facts

- Social Security disability claimants in New York, joined by the City of New York, brought a putative class action seeking declaratory and injunctive relief against federal officials responsible for administering disability determinations.
- Plaintiffs alleged a continuing, agency-wide policy of “nonacquiescence,” meaning administrative adjudicators allegedly did not apply controlling Second Circuit disability standards in routine adjudications.
- A primary alleged conflict involved the Second Circuit “treating physician rule,” under which a treating physician’s disability opinion was binding unless contradicted by substantial evidence.
- Plaintiffs alleged the agency instead used internal standards allowing administrative law judges to discount treating-source opinions for lack of objective support even absent substantial contrary evidence, and to confine adverse circuit decisions to the specific litigants who obtained them.
- Plaintiffs alleged this system caused unlawful denials or terminations of benefits, biased adjudication, and disparate impact on claimants unable to pursue federal court review.
- The City alleged fiscal injury because it had to provide local assistance to residents whose federal benefits were allegedly denied or terminated under unlawful standards.
- The opinion primarily resolved pretrial motions, including motions to dismiss for lack of subject-matter jurisdiction, class certification, and motions concerning remand, intervention, and consolidation.

## Issues

1. Whether the court had jurisdiction under 42 U.S.C. § 405(g) to hear a systemic challenge to agency policies, including whether presentment and exhaustion requirements were satisfied or could be waived.
2. Whether § 405(g)’s 60-day filing limit barred relief for claimants affected by allegedly ongoing agency practices.
3. Whether the City had standing based on alleged fiscal harms traceable to federal disability adjudication policies.
4. Whether the proposed class satisfied Rule 23 requirements for certification of a class seeking declaratory and injunctive relief.
5. Whether additional claimants could intervene and related actions could be coordinated through remand and consolidation orders.

## Decision

- The court denied defendants’ principal jurisdictional challenges and allowed the systemic claims to proceed under § 405(g).
- The court held the presentment requirement was met because class members had presented claims for benefits to the agency.
- The court waived exhaustion in relevant part, treating the suit as a collateral, systemwide challenge for which exhaustion would be futile and could cause ongoing harm.
- The court declined to apply the 60-day limitation rigidly to bar systemic relief where plaintiffs alleged continuing agency practices affecting claimants over time.
- The court held the City had standing based on alleged concrete fiscal injuries linked to the challenged federal practices.
- The court granted class certification for a large class of New York disability claimants affected by the alleged nonacquiescence and related adjudicatory practices.
- The court granted or otherwise resolved motions concerning intervention of additional plaintiffs and coordination of related cases in a manner that expanded participation and case management.

## Legal Principles

- Section 405(g) jurisdiction requires presentment of a benefits claim to the agency; that component is not waivable.
- The exhaustion component associated with § 405(g) may be waived when plaintiffs raise collateral challenges to systemwide practices and when exhaustion would be futile or risk prolonged deprivation of benefits.
- Equitable considerations may preclude strict application of § 405(g)’s 60-day filing limit in suits seeking prospective, systemic relief against ongoing practices.
- A municipality may have standing where it plausibly alleges direct fiscal injury fairly traceable to federal benefit-administration policies.
- Rule 23 certification is appropriate where a large group of claimants is allegedly affected by a common agency policy presenting shared legal questions and where named plaintiffs and counsel can adequately represent the class.

## Conclusion

The court permitted a class action challenging alleged agency nonacquiescence in controlling circuit disability law to move forward, finding § 405(g) jurisdiction with presentment satisfied and exhaustion waived in part, recognizing municipal standing, and certifying a broad class seeking declaratory and injunctive relief.


Stieberger v. Heckler, 615 F. Supp. 1315 (S.D.N.Y. 1985)