Bowen v. City of New York

In Bowen v. City of New York, 476 U.S. 467, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986), a class of social security claimants made the claim analogous to that of plaintiffs here that the Secretary of Health and Human Services had a clandestine policy of denying benefits to claimants with mental impairments without conducting the individualized evaluation of the claimants' ability to work required by the sequential evaluation process. 476 U.S. at 473, 106 S.Ct. at 2026. The district court included in the class claimants who had received final agency determinations but who had not sought judicial review within sixty days as required by 42 U.S.C. Sec. 405(g), and claimants who failed to exhaust their administrative remedies. 476 U.S. at 475-76, 106 S.Ct. at 2027. The Court upheld the class certification as to both groups. Noting that the sixty-day requirement in 42 U.S.C. Sec. 405(g) was not jurisdictional but rather in the nature of a statute of limitations, id. at 478, 106 S.Ct. at 2029, the Court applied the principle of equitable tolling to excuse the failure to seek judicial review, id. at 480-81, 106 S.Ct. at 2030. Equitable tolling was appropriate, the Court reasoned, because the government's " 'secretive conduct prevented plaintiffs from knowing of a violation of rights.' " Id. at 481, 106 S.Ct. at 2031 (quoting City of New York v. Heckler, 742 F.2d 729, 738 (2d Cir.1984), aff'd 476 U.S. 467, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986)). The same rationale justified waiving the exhaustion requirement for those claimants whose opportunity to pursue administrative remedies had lapsed prior to the filing of the class action. Id. 476 U.S. at 482, 106 S.Ct. at 2031. The Court also concluded that those claimants who failed to exhaust administrative remedies after the class action was filed were not required to do so because the claims raised in the class action which addressed systemwide violations by the Secretary were collateral to individual claims for benefits. The plaintiffs' challenge was not based on individual facts and hence there was no need to let the agency develop a factual record. In light of the agency's adherence to its policy, exhaustion would be futile. Id. at 485, 106 S.Ct. at 2032-33. The Court also refused to disturb the district court's finding that the claimants would suffer irreparable harm by being forced to undergo the administrative review process. Id. at 483-84, 106 S.Ct. at 2031-32. Finally, the Court cautioned that not "every internal policy that is found to be inconsistent with legal requirements, and arguably touches upon the outcome of a class of cases, will justify tolling the statute or limitations or excusing exhaustion." Id. at 487, 106 S.Ct. at 2033. In Bowen v. City of New York, 476 U.S. 467 (1986), the Supreme Court held that the application of an illegal, secret, internal policy by the Secretary of Health and Human Services in adjudicating Social Security Act claims equitably tolled the limitations periods for seeking judicial review and waived the exhaustion of administrative remedies. Id. at 480-86. Moreover, the Court upheld the district and appellate courts finding that the harm caused by the wrongful denials of disability claims was irreparable. Id. at 484. The Court stated: These claimants stand on a different footing from one arguing merely that an agency incorrectly applied its regulation. Rather, the District Court found a systemwide, unrevealed policy that was inconsistent in critically important ways with established regulations. Id. at 485.