Stephanie G. v. O'Malley

Background

Stephanie G. applied for Social Security disability insurance benefits, alleging that she became unable to work beginning November 1, 2017. The Social Security Administration denied the application initially and on reconsideration. After a hearing, an administrative law judge (ALJ) issued a written decision denying the claim. The Appeals Council denied review, making the ALJ’s decision the final agency decision.

Stephanie G. appealed to the district court. She argued that the decision was not supported by substantial evidence and that the ALJ lacked authority under the Federal Vacancies Reform Act (FVRA). The magistrate judge recommended granting Stephanie G.’s motion for summary judgment in part, vacating the ALJ’s decision, and remanding the claim for a new hearing before a properly appointed ALJ other than the ALJ who conducted the first hearing. The Commissioner objected.

ALJ Appointment and the FVRA

The court explained that the Commissioner of Social Security is a principal officer who must be appointed through the constitutionally required process. The FVRA limits how long an acting officer may perform the functions of a vacant office. The court interpreted the statute’s reference to the person “serving” as an acting officer to mean someone who is presently serving in that capacity, not someone whose authorized service had already expired.

Nancy Berryhill became Acting Commissioner on January 21, 2017. The Government Accountability Office concluded that her valid acting service expired on November 16, 2017. Berryhill later purported to ratify and reappoint the agency’s ALJs on July 16, 2018, after President Trump nominated Andrew Saul to become Commissioner. The court rejected the Commissioner’s argument that Saul’s nomination automatically restored Berryhill’s authority to act. Because Berryhill was not properly serving as Acting Commissioner when Saul was nominated, the nomination did not restart Berryhill’s authority under the FVRA.

The ALJ who decided Stephanie G.’s claim had initially been appointed by SSA staff rather than by the President or a properly authorized principal officer. The court concluded that Berryhill’s later ratification was statutorily ineffective. As a result, the ALJ lacked authority to hear and decide Stephanie G.’s case.

Arguments for Upholding the Decision

The court rejected the Commissioner’s argument that the President had independently authorized Berryhill to serve under 42 U.S.C. § 902(b)(4), because the Commissioner presented no evidence that Berryhill actually served under that provision. The court also rejected reliance on the rule of necessity, reasoning that complying with constitutional and statutory appointment requirements was not an absurd result.

The court further declined to apply the de facto officer doctrine, which can give legal effect to actions taken by someone acting under an official title despite a later-discovered defect in the person’s appointment. The court concluded that the Commissioner had not shown the burden that would result from applying the ruling and noted that the affected group consisted of claimants meeting specified procedural conditions, including having timely raised a challenge to Berryhill’s ratification.

Disposition

The court overruled the Commissioner’s objections and adopted the June 21, 2022 report and recommendation. It granted in part Stephanie G.’s motion for summary judgment as to vacating the ALJ’s decision and remanding the disability claim to the SSA for a new hearing before a properly appointed ALJ other than the ALJ who conducted the first hearing. It denied as moot the Commissioner’s motion for summary judgment. The ruling required a new hearing but did not itself award disability benefits.

Judge Wilhelmina M. Wright signed the order.