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Hicks v. Colvin

United States District Court, E.D. Kentucky, Southern Division, Pikeville

December 21, 2016

AMY JO HICKS, Plaintiff,
CAROLYN W. COLVIN, Acting Commissioner of Social Security, Defendant.


          Amul R. Thapar, United States District Judge.

         “Just trust us: We're the government.” That's not something you are supposed to hear every day. For good reasons, the Constitution limits the government's freedom to act simply on trust. One reason is that withholding this freedom from the government protects the freedom of its citizens. Alexander Hamilton, a founding father before he was a Broadway star, put the point this way: “To bereave a man of life . . . or by violence to confiscate his estate, without accusation or trial, would be so gross and notorious an act of despotism as must at once convey the alarm of tyranny throughout the whole nation.” The Federalist No. 84, at 512 (Alexander Hamilton) (Clinton Rossiter ed., 1961) (quoting 1 William Blackstone, Commentaries *136; 4 id. at *438). Hence provisions like the Due Process Clause. The main point of that clause, to put it less eloquently than Hamilton would have, is that the government cannot do things to you without telling you why and without giving you a chance to speak for yourself.

         Here, the Social Security Administration (“SSA”) has asked the Court to trust it in two ways: First, to trust that it correctly cancelled Amy Jo Hicks's benefits without letting a judge consider all the evidence in the record; and second, to trust that it has correctly interpreted the Social Security Act to require this procedure. In its previous opinion, the Court declined both invitations. R. 36. It did so for two reasons, one rooted in the formal principles planted in the Due Process Clause, see id. at 7-16, the other in the Supreme Court's newer, more functional approach to due process, see id. at 22-31. The SSA now asks the Court to change its opinion. R. 39.

         I. Background

         For Amy Jo Hicks, it all started when the SSA's Inspector General (“OIG”) found reason to believe that fraud was involved in Hicks's application for disability benefits. When the OIG discovers fraud, a statute requires the SSA to “immediately redetermine” whether someone deserves her benefits and to “disregard any evidence if there is reason to believe that fraud” was involved in producing that evidence. 42 U.S.C. §§ 405(u)(1)(A)-(B). As the SSA has interpreted that statute, the SSA “must disregard evidence” completely when the OIG (rather than the SSA itself) finds reason to believe that the evidence is fraudulent. See Social Security Administration Hearings, Appeals, and Litigation Law Manual (“HALLEX”) § I-1-3-25(C)(4)(a). Thus, while redetermining her entitlements, the administrative law judge (“ALJ”) excluded any evidence that Hicks had submitted from her lawyer, and alleged fraudster, Eric Conn or anyone associated with his alleged scam. Hicks could not challenge the exclusion; under the SSA's internal regulations, even the ALJ “d[id] not have discretion to reconsider” whether that evidence should have been excluded. Id. When the OIG believes that a piece of evidence is fraudulent, that evidence becomes invisible.

         Hicks sued, arguing among other things that the redetermination procedure violated her right to due process. R. 1 ¶ 14. The SSA responded that the Court should defer to its understanding of its statutory obligations; that the SSA already provided Hicks with so many procedural safeguards that one more would have been unnecessary; and that if the SSA had been wrong about Hicks, she was only the “needle in the haystack.” R. 25 at 17, 20, 27. The Court disagreed. Due process does not permit trust; it demands a space for doubt. Or as the Court has put it: “When the government asserts a fact, and when that fact affects someone's right to life, liberty, or property, due process requires the government to let that person speak for himself.” R. 36 at 12-13. And Hicks never got that chance.

         In its Rule 59 motion, the SSA does not accuse the Court of misinterpreting the Due Process Clause. Actually, the SSA seems to agree that due process requires meaningful hearings and that those meaningful hearings must offer a chance to challenge the government's factual assertions. See R. 39 at 3-4. The SSA believes that the Court simply misapplied that principle in this case. In support, the SSA runs through-with great attention to detail-all the evidence that was already in Hicks's file for the ALJ to consider during her redetermination hearing. R. 39 at 6-11. With four hundred pages already before the ALJ, the SSA says, a few extra ones would not have made much difference. Id. at 11. After all, no one complains that novels are too short. If the Court had understood the context correctly, the SSA believes, the Court would have realized that Hicks has already received all the process she is due. Id. at 12.

         Under Rule 59(e), a court must amend its opinion if it was premised on a “clear error of law.” GenCorp, Inc. v. Am. Int'l Underwriters, 178 F.3d 804, 834 (6th Cir. 1999); see Fed. R. Civ. P. 59(e). The Court will therefore consider whether either ground for its opinion-i.e., the formal meaning or the functional application of the Due Process Clause- was clearly erroneous.

         II. Ground one: The Due Process Clause

         a. The formal meaning of due process

         The SSA's digest of the record provides helpful context. But context is not the point. The Court did not hold that the SSA's redetermination procedure-specifically the regulation that insulates the OIG's “reason to believe” finding from review-was unconstitutional only as applied to Hicks. The Court held that, as a result of the regulation, the redetermination procedure was facially unconstitutional under the Due Process Clause. R. 36 at 31 (“[T]he redetermination process is unconstitutional.”); id. at 32 (“But to be clear, the Court only considers one part of the redetermination process unconstitutional. That is the paragraph in the HALLEX manual providing, in relevant part: ‘[A]djudicators do not have discretion to reconsider the issue of whether the identified evidence should be disregarded when based on an OIG referral of information or a referral based on information obtained during a criminal or other law enforcement investigation.'” (quoting HALLEX § I-1-3-25(C)(4)(a))).

         But in case that disposition was unclear before, the Court is happy to clarify it now. Striking down a rule on its face is, of course, an “exceptional remedy, ” Carey v. Wolnitzek, 614 F.3d 189, 201 (6th Cir. 2010), and one that courts should use only if they can “leave nothing standing, ” see Speet v. Schuette, 726 F.3d 867, 872 (6th Cir. 2013) (quoting Connection Distrib. Co. v. Holder, 557 F.3d 321, 335 (6th Cir. 2009) (en banc)). One reason not to leave a regulation standing is if it violates the Constitution. And as discussed here and in the Court's previous opinion, due process requires that people receive meaningful hearings before the government takes away their property for good. See Mathews v. Eldridge, 424 U.S. 319, 339-40 (1976). Although no two hearings are alike, all “meaningful” hearings give people an opportunity to rebut the government's assertions about facts that affect their rights. See R. 36 at 9-16 (touring cases that establish and apply this rule). An internal SSA regulation forecloses that opportunity. As such, the regulation-and consequently the SSA's redetermination procedure-violates the Constitution.

         This result is dictated by the formal meaning of due process. Not to get too academic, but formalism is the basic idea that law is a science and that all one needs to practice that science is access to a law library. See Christopher Columbus Langdell, Speech at the Quarter Millennial Celebration of Harvard University, reprinted in 3 Law Q. Rev. 123, 124 (1887) (“[T]he library is . . . to us all that the laboratories of the university are to the chemists and physicists, all that the museum of natural history is to the zoologists, all that the botanical garden is to the botanists.”). Rules have a definite shape that anyone-judges, lawyers, and average citizens alike-can discern if they just read the relevant cases, laws, and provisions. And the textbook definition of due process is that a person deserves a “meaningful hearing” before the government takes something from her. See Armstrong v. Manzo, 380 U.S. 545, 552 (1965); see also R. 36 at 9-16 (collecting cases).

         The SSA complied with only half of that rule: Hicks got a hearing. Due process also required that hearing to be meaningful. To be considered meaningful, a hearing must provide a chance “to rebut the [g]overnment's factual assertions before a neutral decisionmaker.” Hamdi v. Rumsfeld, 542 U.S. 507, 533 (2004). In this case, however, the government (here played by the OIG) asserted a fact: that some of Hicks's medical evidence was fraudulent. Hicks then got a hearing. But she never got a chance to rebut the OIG's factual assertion- the very ...

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