Brian T. D. v. O'Malley

Background

Brian T. D. sought judicial review of the denial of his application for disability insurance benefits. He alleged that radiating back pain prevented him from working. After the Social Security Administration denied the application initially and on reconsideration, Administrative Law Judge Erin Schmidt held a hearing on August 14, 2018. On October 1, 2018, Judge Schmidt denied the application. The Appeals Council denied review in July 2019, making the ALJ’s decision final.

Brian T. D. filed this federal case seeking review. He moved for summary judgment, asking the court to reverse the denial and remand the claim. He argued that the ALJ’s decision was wrong on the merits and that Judge Schmidt lacked authority because her appointment violated the Constitution’s Appointments Clause. The Commissioner filed a cross-motion for summary judgment and argued, among other things, that the challenge had been waived because it was not raised during the administrative proceedings. After the Supreme Court held in a separate case that Social Security claimants could raise this type of challenge for the first time in federal court, the parties briefed whether Acting Commissioner Nancy Berryhill had validly ratified the appointments of Social Security ALJs.

Parties’ arguments

The Commissioner argued that Berryhill had authority under the Federal Vacancies Reform Act to perform the Commissioner’s functions, including appointing or ratifying the appointments of inferior officers such as ALJs. The Commissioner maintained that President Donald Trump’s nomination of Andrew Saul on April 17, 2018, allowed Berryhill to resume serving as Acting Commissioner while the nomination was pending. The Commissioner therefore argued that Berryhill’s July 2018 ratification of the ALJ appointments was effective.

Brian T. D. argued that Berryhill’s initial period of acting service ended when the statutory time limit expired on November 16, 2017. He argued that the Federal Vacancies Reform Act did not allow Berryhill to resume acting service after that period had ended. He also raised constitutional arguments concerning Berryhill’s authority and the use of an automatic succession order, although the court did not need to decide all of those issues.

Court’s analysis

The court began with the statutory issue under the Federal Vacancies Reform Act rather than the constitutional questions. The court assumed, without deciding, that Berryhill’s acting service was governed by that Act and that President Trump’s failure to revoke the prior succession memorandum or appoint someone else was sufficient to direct Berryhill’s service under the statute.

The Act generally limits an acting officer’s service to 210 days from the date of the vacancy, with an additional period while a timely nomination is pending. The court interpreted the Act’s use of the present-tense phrase “the person serving as an acting officer” to mean that the person must still be serving when the nomination is submitted. Because Berryhill’s acting service had already ended before Saul was nominated, she was not then serving as Acting Commissioner. The nomination therefore did not revive or restart her authority.

The court rejected the Commissioner’s proposed “spring-back” interpretation, under which an acting officer could serve for the initial period, leave the position, and return when a nomination was submitted. The court concluded that the statute establishes one period of acting service that may be extended or tolled in specified circumstances, not separate, noncontinuous periods of service. It also relied on the statute’s provision that the office remains vacant when no one is properly performing its functions under the Act.

Holding and disposition

The court held that Berryhill’s purported ratification was ineffective because she was not properly serving as Acting Commissioner when she made it. Because Judge Schmidt’s appointment was not properly ratified, the court held that she lacked authority to hear and decide Brian T. D.’s case. The court vacated the ALJ’s decision and remanded the disability claim to the Social Security Administration for a new hearing before a properly appointed ALJ other than Judge Schmidt.

The court did not decide whether the ALJ’s disability determination was supported on the merits, whether Berryhill’s service independently violated the Appointments Clause, or whether a properly serving Acting Commissioner could have cured the appointment problem through ratification. It stated that the new hearing would give Brian T. D. another opportunity to present his claim and would require a new ALJ to reconsider the record, testimony, and credibility determination.

Order

The court granted Brian T. D.’s Motion for Summary Judgment, vacated the Commissioner’s decision in its entirety, and remanded the case for a new hearing before a properly appointed ALJ who was not the same ALJ who presided over the first hearing. The court denied the Commissioner’s Motion for Summary Judgment.