Califano v. Yamasaki

PETITIONER:Califano
RESPONDENT:Yamasaki
LOCATION:C and P Telephone Baltimore Headquarters

DOCKET NO.: 77-1511
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 442 US 682 (1979)
ARGUED: Mar 19, 1979
DECIDED: Jun 20, 1979

ADVOCATES:
Peter Buscemi – for petitioner, pro hac vice, by special leave of Court
Stanley E. Levin – for respondents

Facts of the case

Question

Audio Transcription for Oral Argument – March 19, 1979 in Califano v. Yamasaki

Warren E. Burger:

We’ll hear arguments first this morning in 1511, Califano against Elliot.

Mr. Buscemi, you may proceed whenever you’re ready.

Peter Buscemi:

Mr. Chief Justice and may it please the Court.

This case involves a challenge to the procedures employed by the Secretary of Health, Education, and Welfare in recovering overpayments to the beneficiaries of social security, old age, survivors, and disability insurance.

The principal question presented is whether a beneficiary is entitled to an evidentiary hearing before, rather than after, his monthly benefits are reduced to recover a previous overpayment.

The case is here for the second time on a writ of certiorari to the United States Court of Appeals for the Ninth Circuit.

In 1976, in response to the Secretary’s petition for review, this Court vacated the judgment of the Court of Appeals and remanded for reconsideration in light of the decision in Mathews against Eldridge.

The Court of Appeals adhered to its initial result and the Secretary, again, sought certiorari.

There were two suits consolidated in the Court of Appeals: One, from the Western District of Washington, Buffington case and, the other, from the District of Hawaii, Elliot.

Buffington is a nationwide class action on behalf of recipients of old age and survivors benefits.

Elliot is limited to persons living in Hawaii but it includes disability beneficiaries as well as old age beneficiaries.

The procedures attacked by respondents begin with the Secretary’s determination that an overpayment has occurred.

In many cases, this determination is based on an annual earnings report filed by the beneficiary himself.

Other times, the initial determination is based on the Secretary’s independent discovery of some administrative error or a fact or event that affects a recipient’s continuing eligibility for benefits.

When the Secretary concludes that an overpayment has occurred, he notifies the beneficiary of his determination.

Respondents’ complaints in the District Courts challenge the adequacy of the notice provided, and the District Courts ordered that the Secretary provide a more detailed information about the reasons for the overpayment and the availability of administrative review.

The Court of Appeals affirmed and the Secretary did not seek further review of this aspect of the Court’s decision.

Instead, he has developed more elaborate notice forms that the Social Security Administration is now using in notifying beneficiaries that they’ve received overpayments.

There’s apparently still some squabbling in the Court of Appeals over whether the new forms comply with the Court of Appeals’ decision, but that question is not presented here.

Potter Stewart:

What question, specifically, is not presented?

Peter Buscemi:

The question of the adequacy of the new notice forms that the Secretary has developed in response to the Court of Appeals’ decision.

Potter Stewart:

Right.

William H. Rehnquist:

Whether those forms comply with the Court of Appeals’ decision.

Peter Buscemi:

Exactly.

Potter Stewart:

Is a matter for the Court of–

Peter Buscemi:

That’s right.

Potter Stewart:

— appeals are now being controverted in the Court of Appeals.

Peter Buscemi:

Right.

The Secretary’s notice informs the beneficiary of the date and the amount of the overpayment and the way in which it occurred.

The local Social Security officers are instructed to make sure that the explanation is kept in simple and non-technical terms.

Peter Buscemi:

The notice also informs the beneficiary of the Secretary’s proposed method of recovery.

The date of the first monthly payment to be reduced at the amount of the reduction, and the month in which full benefits will be resumed after the overpayment has been recovered.

In addition, the beneficiary is told that his right to request reconsideration of the overpayment determination or waiver of recovery or both.

And, standards for waiver are set forth in the notice and the procedures for requesting reconsideration or waiver are described.

They are– the notice identifies the forms that must be completed in connection with an application for reconsideration or waiver, and volunteers the assistance of employees at local Social Security Offices in filling out the forms.

Finally, the beneficiary is advised that if he does request reconsideration or waiver within 30 days, his benefits will not be reduced until after the Secretary has acted on his request.

Even if no request is made within 30 days of the notice, a reconsideration request made within two months or a waiver request whenever made halts the reduction of benefits and results in the resumption of full benefits until after the Secretary has acted on the request.

The statutory provision that gives rise to all these procedures is Section 204 of the Social Security Act.

Section 204 (a) provides that whenever the Secretary find that more than the correct amount of payment has been made, proper adjustment or recovery shall be made under regulations prescribed by the Secretary, but Section 203 (b) adds a qualification.

It says that there shall be no recovery–

John Paul Stevens:

Where are you before this is set out with in this?

Peter Buscemi:

They are set out in the appendix to the certiorari petition at pages 155 (a) and 156 (a).

The qualification Section 204 (b) provides that there shall be no recovery in any case where the overpaid person is without fault in receiving the overpayment and where the recovery would defeat the purpose of the Social Security Insurance Program or would be against equity and good conscience.

Warren E. Burger:

What do you take to mean by that, “without fault?”

Suppose there’s a $5-increase by the state and the recipient cashes the check.

How does the “without fault” clause apply to that?

Peter Buscemi:

Well, Mr. Chief Justice, I believe that the “without fault” language is described in the– or is defined, I should say, in the Secretary’s regulations in 20 CFR 404.507, I believe.

Warren E. Burger:

How does what–

Peter Buscemi:

And there —

Warren E. Burger:

— people matter?

Peter Buscemi:

And there, the Secretary states that the critical consideration is whether the beneficiary should have known that he was receiving or had received an overpayment.

Now, in the case of a difference as small as the one that you suggest, it may well be that the average beneficiary should not have known that he was receiving an overpayment.

And, in any event, a difference of that size is not likely to be recovered by the Secretary because his own Claims Manual provisions require that there’d be at least a $10-a month reduction benefits, otherwise, recovery is simply waived.

Warren E. Burger:

But that’s merely an instruction– an internal instruction, isn’t it?

Peter Buscemi:

Well–

Warren E. Burger:

The $10-a month.

Peter Buscemi:

Excuse me?

Warren E. Burger:

The $10-limit merely binds the staff of the Social Security.

Peter Buscemi:

Yes, that’s included in the Claims Manual.

It’s not included in the regulations, but the regulations do include the definition or the Secretary’s view of the meaning of the words “without fault” in the statute.

John Paul Stevens:

Whose the — what is the practice as to the burden?

In order to recoup, must the Secretary prove fault?

I mean, fault seems to be a– if the person is without fault, there can be no recovery.

Peter Buscemi:

That’s right.

John Paul Stevens:

And that who — what is the procedure for determining, if you or do you know?

Peter Buscemi:

Yes.

The waiver procedure is that the beneficiary who believes that he is without fault and that recovery would defeat the purpose of the Social Security program files a prepared form with the Secretary, it’s form no. SSA-632, and that is divided by into several parts, the first part of which, addresses the question of “without fault” and it asked — I think, the question says to the beneficiary, “state why you believe that you were not overpaid or why you believe that you were not at fault in receiving the overpayment.”

Byron R. White:

And then, I suppose there is– whichever way the Secret — if the Secretary decides on recoupment, there’s review, I take it.

Peter Buscemi:

Oh, definitely.

If the Secretary receives the form —

Byron R. White:

What if the reviewing Court decided that the evidence was absolutely equally balanced, who wins?

Peter Buscemi:

Well, I — I mean, I don’t know because I don’t know what the cases have held but I think —

Byron R. White:

That’s why I asked you — that’s why i asked you a while ago what — who’s got the burden.

Peter Buscemi:

I think, in a closed case like that, the Secretary would waive recovery.

Byron R. White:

So, he then undertakes to prove fault.

Peter Buscemi:

Before the administrative review, I suppose that the Secretary would have to show that the beneficiary should have known —

Byron R. White:

In — in deciding whether to insist on recoupment, the Secretary then assumes that at whatever procedures he uses must prove fault.

He undertakes to prove fault.

Peter Buscemi:

That’s right.

He then takes to determine whether the beneficiary should have known that he was receiving an overpayment, and that’s the standard that he uses in acting on the waiver application and if the sa — and I assume that the same standard would apply in the later administrative review proceedings.

Byron R. White:

So that, if the person from whom recoupment might be sought, if he’s completely silent, the Secretary must still come forward with proof of fault.

Is that it?

Peter Buscemi:

No, that’s not so.

I think that the Secretary’s regulations are perfectly reasonable implementation of the statutory scheme.

If the person does not request waiver —

Byron R. White:

Right.

Peter Buscemi:

If the person does not suggest that he was not at fault, I think the Secretary is justified in proceeding with recovery.

Warren E. Burger:

If the check normally was $152 and the recipient gets a check for $1,152 because the computer has stripped its gears or something, that would be a clear case, wouldn’t it, that he was at fault in accepting it?

Peter Buscemi:

That’s precisely the case and, as a matter of fact, there are a substantial number of cases that are exactly like that.

I think, for example, the case of Mrs. Biner, one of the respondents in the Buffington suit, is similar to that.

Peter Buscemi:

It does not involve a computer error, but involves a report to the local Social Security Office that employment — that earnings will be discontinued and Social Security benefits would have begun.

Earnings continued at the same level, but — and the Social Security benefit payments were accepted by Mrs. Biner.

She had told the Social Security Office that she would be earning — she would not be earning any money and, therefore, the benefits should begin.

When she did earn the same amount of money that she’d been earning for the previous two years, she should have known that the benefits could not be paid at that level.

And, that’s in fact what has been found not only by the Secretary on his initial review of the waiver application, but also by the administrative law judge at the evidentiary hearing that was provided for.

Warren E. Burger:

Well, there are at least two different kinds of errors that can be made, are there not, at least two?

That is, one where there’s a change in status and entitlement and, the other, where it’s simply a mechanical error, is that not?

Peter Buscemi:

That’s right.

There are many possibilities.

John Paul Stevens:

Mr. Buscemi, do I correctly understand that the mere fact that the beneficiary proves that he or she was without fault is not enough to establish the right to retain the money?

Warren E. Burger:

That’s absolutely right.

John Paul Stevens:

I just want to be sure.

Warren E. Burger:

The beneficiary must also — the Secretary must also determine that recovery would defeat the purpose of the Social Security Insurance Program or would be against equity in good conscience.

And, he has defined those phrases to include such factors as financial hardship or detrimental reliance.

Peter Buscemi:

So that even if there is no financial hardship if the regulations provide, 20 CFR 404.509, that if the beneficiary has relied to his detriment on an overpayment which he was without fault in receiving, then there’s no recovery even if it could be recovered without any — imposing any financial hardship.

Warren E. Burger:

Does this record show or do we have to rely, if we need it on Social Security, on HEW reports as to how much a year in each fiscal year is overpaid for one reason or another and how much is — that is, how much is the area of recoupment?

Peter Buscemi:

Well, the record does show the number of overpayments made in a year.

It’s a rather extraordinary number, approximately one-and-a quarter million overpayments a year.

I don’t believe that the record shows the average amount of those overpayments, although we have obtained the Social Security Administration’s latest figures on that and they suggest that the average amount of an overpayment is in the vicinity of $500, so that we are talking about something like $600 million a year.

It’s the total amount that’s overpaid.

John Paul Stevens:

When you use the 1.25 million, does that mean that many persons or that many checks?

Peter Buscemi:

That’s a little bit unclear, but I think that means that many persons.

Now, respondents contend that Section 204 (b) of the Social Security Act and the Due Process Clause of the Fifth Amendment require that they’d be afforded an opportunity for an evidentiary hearing before their benefits are reduced to recover an overpayment.

They devoted little attention to the statutory argument in the Courts below and neither the Court of Appeals nor the District Courts addressed it.

Rather, the Courts held that, under this Court’s decision in Goldberg against Kelly, the Due Process Clause requires a pre-recoupment hearing.

The Court of Appeals relied heavily on an earlier decision by the Third Circuit, Mattern against Weinberg, that it reached the same result.

The Secretary has petitioned for review the Third Circuit’s ruling, no. 78-699 from that appendix.

Five months after the Court of Appeals decision, this Court decided Eldridge.

Eldridge held that due process does not require a hearing before the Secretary may terminate Social Security disability benefits on the basis of a finding that disability has seized.

When the Court remanded the present case for reconsideration in light of Eldridge, the Court of Appeals distinguished Eldridge and adhered to its earlier conclusion.

Peter Buscemi:

The Court ruled —

Potter Stewart:

Eldridge involved primarily a medical expert opinion evidence, didn’t it?

Peter Buscemi:

That’s right.

In the Court’s opinion in Eldridge, the Court emphasized that the question of whether or not a disability continued could be resolved on the basis of written submissions because the bulk of the evidence would be medical, but the Court did note —

Potter Stewart:

Expert medical opinion.

Peter Buscemi:

That’s right, but the Court did note in Eldridge that credibility of the claimant might well be relevant in the ultimate disability assessment.

For example, where the question of disability turns on the extent of pain or discomfort in performing certain operations, the claimant’s disability might well be involved, and the Court did recognize that in the Eldridge opinion.

William H. Rehnquist:

Mr. Buscemi, I realize it’s difficult when you’re peppered with questions from nine people to know exactly what your oral argument will cover.

Do you plan to cover in your oral argument the preclusive effect of 205 (g) and the availability of mandamus or do you intend to leave that to the briefs?1

Peter Buscemi:

Well, I did plan to say something about that.

I can summarize it now if you’d like.

William H. Rehnquist:

Use your own judgment.

It’s your case.

Peter Buscemi:

Well, just to be very brief about it, the argument that the Secretary has made in his brief is that this Court in the Salfi case held that 205 (h) — Section 205 (h) of the Social Security Act precludes other basis of District Court jurisdiction and limits District Court jurisdiction to that provided in Section 205 (g) of the Act.

On the basis of the statute and this Court’s interpretation in Salfi, we’ve argued that there is no possibility for mandamus jurisdiction under Section 1361.

That’s the argument.

William H. Rehnquist:

I would not prevent us from reaching, in the government’s view, the constitutional questions raised by a couple of the named parties, but it would prevent na — kind of a nationwide class action designated in the Western District of Washington.

Peter Buscemi:

That is our view of the matter.

There is — there is jurisdiction over the claims of the individual named respondents because of this Court’s interpretation of Section 205 (g) in the Eldridge case.

There has not been a final decision of the Secretary at the end of the full administrative review procedure, but this Court held in Eldridge that such a final decision was not necessary where there is a constitutional right asserted and the claim was collateral to the entitlement to benefits.

Warren E. Burger:

Your brief does not ar — deal or at least it does — it dealt very briefly with Section 204, the statutory issue inherent in this case, and neither the District Court nor the Court of Appeals treated it.

Why — do you care to suggest hypothesis as to why neither of those Courts undertook to treat the statutory question?

Peter Buscemi:

Yes, I think the answer is quite clear.

I think the answer is that respondents made very little of the statutory issue in the Court of Appeals.

Warren E. Burger:

And that doesn’t give the Court a license — any Court a license to ignore the statutory issue though, does it?

Peter Buscemi:

Well, that’s true, Mr. Chief Justice, but I do think that the Court’s view of the case is inevitably colored by the briefs that are filed by the parties, and I think that where the claim of the respondents was almost exclusively addressed to the constitutional point, it’s not surprising that the Court viewed the case in that light.

In any event, as we suggest in our reply brief, there is nothing to the statutory argument in the Secretary’s view.

The respondent contends that unless the Secretary undertakes a very exacting inquiry in his words concerning fault in the equitable considerations involved, in each case, he violates the statute.

The idea is that the Secretary cannot recover any overpayment unless he determines that the criteria of Section 204 (b) are not met.

But, the point of the Secretary’s procedures is that he determines that the criteria of 204 (b) are not met by asking the individual beneficiary whether he wishes to request reconsideration or waiver.

Peter Buscemi:

If the beneficiary does not wish to request either of those forms of administrative relief but, instead, is willing to allow the overpayment to be recovered, then the Secretary goes ahead.

And, this is an– it seems to me, a reasonable procedure to affect the purposes of the statute.

Now, Eldridge applied three considerations that guide the Court in determining what process is due in a particular situation.

The Court of Appeals discussed this but, we think, reached the wrong result.

The first of the considerations is the private interest that would be affected by the deprivation.

The respondents’ attempt to analogize the interest in keeping overpayments to the interest in the continued payment of welfare benefits that was at issue in Goldberg against Kelly, but there are important distinctions between the two.

Goldberg is the only case in which this Court has held that the Due Process Clause requires an evidentiary hearing before an interruption in government payments.

The situation that prompted this application of the Due Process Clause was very different from that involved here.

The disputed benefits there were granted on the basis of need and, by definition, they were the only means by which the recipients could pay for food and clothing, shelter and medical care.

Here, the Social Security insurance benefits are not based on need.

They– the average Social Security beneficiary well have independent assets.

He may well be able to earn money by working and he may well be eligible for welfare payments if a reduction in Social Security payments renders him unable to meet his current expenses.

John Paul Stevens:

Well, Mr. Buscemi, isn’t it true that almost by hypothesis, one who request a waiver does so on the basis of need, claim of need at least?

Peter Buscemi:

Well, not necessarily, Mr. Justice Stevens.

As we mentioned in response to your previous question, the Social — the particular recipient may say “I have relied on the overpayment.

I was without fault in receiving it.

Therefore, I’m entitled to keep it, whether or not I need it.”

John Paul Stevens:

Would the Secretary let that person keep it he had $1 million in the bank?

Peter Buscemi:

Well, that’s a — the regulations apparently say that he would.

The regulations say that if there has been detrimental reliance.

Now, the Secretary might try to avoid allowing him to keep it by saying that it has not been detrimental, but I think that he probably would, under the regulations properly construed.

In addition, the deprivation here is not as serious as the one in Goldberg because it only involves a reduction in the amount of benefits, not a complete termination.

The only time in which benefits will be completely terminated under the Secretary’s overpayment recovery program is when the beneficiary was at fault.

I mean, when the overpayment was received as the result of fraud or when the beneficiary has sufficient income that his entire Social Security check can be withheld and he will still be able to meet current expenses.

In no other situation under the Secretary’s program will all the benefits be withheld.

Finally, the third factor that the Eldridge Court addressed was the government’s interest in the efficient functioning of its program and the administrative burden that additional procedures would entail.

It’s difficult to make precise predictions about the amount of cost that would be involved in the kind of evidentiary hearing requested by respondents, but the Court in Eldridge said that the additional cost were likely to be substantial and any time the additional procedures were required, and I think that that is equally valid here.

We’ve cited in our brief several of the ways in which the requirements of the Court of Appeals decision could — will affect the Social Security Program.

And, I don’t think it’s necessary to go into further detail here.

If the final thing that I’d like to say is that the Secretary’s procedures have been shown to be reliable on the basis of the experience not only before the Court of Appeals decision, but after.

Peter Buscemi:

The– out of the one-and-a quarter million overpayments each year, there are only approximately 40,000 people who asked for reconsideration or waiver.

And, of those, approximately half are granted waiver on the basis of the written submissions.

Thurgood Marshall:

Could it be that the computers are becoming more accurate?

Peter Buscemi:

Well, we hope so.

Thurgood Marshall:

Well, I mean, that could be one reason for this.

Peter Buscemi:

That’s right.

Thurgood Marshall:

So, what good is it to us, those figures?

Peter Buscemi:

Well, I think the figures are relevant because they do indicate that the evidentiary hearing sought by respondents is not required in order to make sure that payments are made to those people who deserve them and that overpayments are only recovered from those people who can– who are supposed to pay them back.

John Paul Stevens:

Mr. Buscemi, on those figures, are you giving us figures under the revised regulations or are those that were in effect before the litigation began?

Peter Buscemi:

Well, the 40,000-figure is a figure that comes from years more recent than those covered by those figures before the District Court.

The — if you look in the petition– the appendix of the petition at pages 99 (a) and 100 (a), you’ll see the figures that were presented to the District Court and they are very incomplete.

They have an accurate figure on the number of overpayments, but they have a very — they have a much too small figure on the number of request for reconsideration or waiver.

They list only about 12,000 requests.

It’s not clear whether that 12,000-figure includes only requests for reconsideration or also request for waiver.

The Secretary now reports that the number of times he gets a request for reconsideration that’s not accompanied by request for waiver is very small.

Most beneficiaries are– do not contest the fact that they have received an overpayment or, if they do, they also ask for waiver.

And, that number is about 40,000 now.

John Paul Stevens:

A related question, I suppose, what do you perceive the issue to be, the constitutionality of the regulations before they were amended or the constitutionality of the regulations after the amendment which would mean, I guess, that we don’t have the benefit of the views of the lower Courts on the latter question?

Which — which are we suppose to decide?

Peter Buscemi:

Well, I think that the question is the constitutionality of the regulations before they were amended, but the only thing that’s been amended is the Claims Manual which deals with the partial adjustment system.

And, that’s what we described in our brief.

That has allowed the Secretary to defer recovery and extend it over a longer period of time, and it also means that the Secretary no longer proposes a complete termination of benefits.

He only proposes a 25% reduction of monthly benefits.

Now, that particular provision of the Claims Manual was not before the Courts below.

But, with respect to the remainder of these provis —

Potter Stewart:

That’s quite a difference in terms of the impact on the beneficiaries.

It’s quite a difference whether they lose their entire benefits or just a reduction, isn’t it?

Peter Buscemi:

That’s true, but in practical effect, under the partial adjustment system that was in effect before the Courts below, the Secretary as a general rule did grant partial adjustments that were requested.

The difference was more in the form of the initial notice to the beneficiary.

It said “we will stop your monthly benefits unless you request waiver or reconsideration or unless you request some other adjustment.

Potter Stewart:

Well, if the issue is the regulations that are no longer in effect, why should we really decide that, if the government no longer has an interest in defending those regulations if it’s got an amended regulation in effect now?

Peter Buscemi:

The issue is whether the respondents are entitled to an oral hearing before recoupment begins.

That issue remains under the new regulations.

There is —

Potter Stewart:

On the waiver issue or on the overpayment issue or on both.

The Court of Appeals for the Ninth Circuit dealt with both.

Peter Buscemi:

Yes, the Court of Appeals for the —

Potter Stewart:

And, according to at least one amicus brief here, the — it’s the understanding of that amicus that the respondents aren’t even — aren’t defending the Court of Appeals decision on the overpayment issue.

Peter Buscemi:

Well, that’s also a little bit unclear.

I think respondents are defending the decision on the overpayment issue if a particular request for reconsideration raises an issue of credibility.

They are not — they are not saying that, in the average case, a request for reconsideration requires a prior hearing.

I may be wrong about that, but that’s the way I read —

Potter Stewart:

Well, they can tell us the answer.

But — but, in other words, the Court of Appeals required a prior hearing for both at least when the credibility of witnesses was —

Peter Buscemi:

Exactly.

Potter Stewart:

Involved in it.

Peter Buscemi:

That’s right.

Potter Stewart:

And the response of the Secretary was to say that that’s an unrealistic dichotomy and, therefore, is —

Peter Buscemi:

It’s just been providing hearings —

Potter Stewart:

For the time being, providing hearings for everybody.

Peter Buscemi:

In all cases, that’s right.

John Paul Stevens:

Can I ask you one other question.

Does the government concede that there is a constitutional entitlement to a hearing at some time, a post-reduction hearing?

Peter Buscemi:

Yes, there is no dispute about that in the case.

John Paul Stevens:

Would you explain to me, is it — in the Government’s view, will there be a greater number of hearings if they come before the reduction takes effect and if it’s postponed?

Peter Buscemi:

Well, what’s been happening is that there have been personal conferences set up before the recoupment begins, and then the full LAJ hearing has been kept at the time after the beginning of a hearing.

So, what– so, in practical effect, the Court of Appeals decision has resulted in the insertion of a new layer of review before the beginning of recoupment.

Harry A. Blackmun:

I’m just wondering.

Why is it a matter of discretion?

Would it cost the government anything significant to just move up the hearing to a pre-reduction hearing instead of a post-reduction hearing?

Peter Buscemi:

Well, the full LAJ hearing apparently does entail more expense and more delay than the personal conference procedure that’s now being used.

Harry A. Blackmun:

Does it entail more expense if it comes later instead of earlier?

I mean, when it comes earlier instead of later?

Peter Buscemi:

Well, it entails more expense in the sense that the — it will probably mean that there will be a longer period of time before recoupment begins because it’s more difficult.

The informal personal conference procedure that the Secretary has developed to comply with the Court of Appeals decision can be administered much more simply than the full LAJ hearing that he has been providing afterwards.

Harry A. Blackmun:

But didn’t you tell us — I’m just — maybe I’ve got this confused.

Didn’t you tell us that if there is a request for a waiver, that you then do not — then that automatically suspends things until there’s a final decision?

Peter Buscemi:

Until there is a decision on the basis of the written submissions.

Harry A. Blackmun:

I see — I see.

I thought it does not suspend it until after the LAJ’s decision.

Peter Buscemi:

That’s right.

Once the decision on the basis of written — of the written submissions is made, then recoupment begins and then, if there is a reversal after the LAJ hearing, then there is full restitution of any moneys that have already been withheld.

Byron R. White:

And you can comply with the Court of Appeals opinion without extending the full LAJ hearing?

Peter Buscemi:

Yes, Mr. Justice White.

The Court of Appeals listed a number of things that have to be provided at the personal conference and they are provided.

They are titled — the beneficiary is entitled to present evidence through witnesses and documents he’s entitled to cross-examine adverse witnesses and he’s entitled to be represented by counsel.

Thank you.

Warren E. Burger:

Very well.

Mr. Levin.

Stanley E. Levin:

Mr. Chief Justice, may the Court please.

I think it’s important at the outset to say what this Court — this case is really about.

Before you today are elderly, infirmed and minor recipients of Social Security benefits who’ve been operating under a system which the Secretary has had an operation for two-and-a half years which has successfully and satisfactory provided them with a very flexible administrative procedure which did not yet exist prior to this Court of Appeals judgment, which allows them to — and meets their capabilities as elderly, infirmed, and minor recipients to assert and — their right to waiver under the statute.

I’d like to go through, for a minute, what the system has been for two-and-a half years to show how flexible it has been and show the various choices.

Potter Stewart:

You — just before you do, you can find the procedures to the right to waiver under the statute —

Stanley E. Levin:

Yes, Mr. Justice —

Potter Stewart:

But just to the fact of overpayment.

Have you, as the amicus American Federal of Labor and Congress of Industrial Organizations understands it, do you no longer defend the portion of the Court of Appeals judgment that relates to hearings as to the fact of overpayment?

Stanley E. Levin:

That’s correct.

Potter Stewart:

We like to understanding?

Stanley E. Levin:

That’s correct.

Stanley E. Levin:

We do not defend the need for an opportunity to be heard on a personal confrontation basis merely for the — to contest the existence of hearing.

Potter Stewart:

Ever — ever?

Stanley E. Levin:

That’s correct.

Potter Stewart:

And — so, this involves only —

Stanley E. Levin:

In this case —

Potter Stewart:

In the area on the question of whether or not the recoupment should be waived under the statute 404 (b).

Stanley E. Levin:

It involves only the issues which are the highly subjective credibility issues under the Secretary’s own regulations, under his Claims Manual, and all — and the other instructions of waiver.

Potter Stewart:

Particularly — going exclusively to waiver.

Stanley E. Levin:

Only to waiver.

Potter Stewart:

Only?

Stanley E. Levin:

Yes, sir.

Potter Stewart:

Yes, thank you.

Stanley E. Levin:

The system for two-and-a half years, in answer to Mr. Justice Stevens’ question, has been one which allows three choices: (a) one of written submissions, which exis — which was the only choice under the earlier system, and for the very small number of recipients who are before you today for whom that is a meaningful and effective means of asserting the waiver question, that’s still retained.

The other two choices are informal and personal conferences, and these allow the recipient the vital and crucial element of a personal confrontation, of an opportunity to be heard, not a full evidentiary hearing.

The restrictions are — the requirements are far less rigid than in Goldberg, and the Court of Appeals recognize this and allowed for this imbalance for this.

So, the system has been in operation for two-and-half years satisfactorily.

The Court of Appeals decision properly acquired this kind of system and we believe it is consistent with both the statutory 204 (b) rights and with the constitution.

William H. Rehnquist:

Perhaps you could help me.

At a — at the system that is now in operation under the Court of Appeals decision, as you suggest, how does the Secretary proceed?

Is the threat — once there’s — assume there’s no request for reconsideration, only waiver.

Stanley E. Levin:

Yes, sir.

William H. Rehnquist:

Is the first issue fault?

Stanley E. Levin:

Yes, sir.

Contrary to counsel’s statement, the burden the Secretary has placed is totally on the recipient to come forward and show that he is not at fault and that either the recovery would be against equity in good conscience or contrary to the purposes of Title 2.

So, in answer to Mr. Justice Stevens’ question regard — and for the other questions regarding the million-dollar situation, if you are not in need, if you are not poor, you’re not entitled to waiver.

Under this —

William H. Rehnquist:

But must — in order to deny recoupment, must the Secretary conclude that the person is without fault?

Stanley E. Levin:

Yes, sir.

William H. Rehnquist:

And, if the person asking for a waiver presents no evidence whatsoever, he just said “I was without fault,” must the Secretary undertake to prove that he was at fault, or what?

Stanley E. Levin:

That is what Congress has said, Your Honor, under 204 (b).

Stanley E. Levin:

The basic fundamental dispute in this case seems to be a continual ignoring by the Secretary of the exact wording of 204 (b), and the mandatory language where Congress has said “we’re going to vest the right to a pre-recoupment waiver decision when these very individualized and subjective issues of waiver in the recipients and then only then if the Secretary needs to burden under 204 (b) can he then take the money back from them.”

And, this shifting of the burden which is so crucial to recipients who are incapable of letting themselves to written submissions but it isn’t?

Byron R. White:

But, if there is fault, he’s absolutely barred from — he must recoup then.

Stanley E. Levin:

That’s correct.

Byron R. White:

If there is fault.

Stanley E. Levin:

That’s correct.

That’s why the case involves highly subjective detailed factual inquiries into what fault is in a given situation.

Warren E. Burger:

Could you give me an example.

Put a little flesh on that.

Stanley E. Levin:

A very good example, Your Honor, would be one of the named respondents, Mrs. Yamasaki.

In Mrs. Yamasaki’s situation, she received a notice saying that she had been overpaid due to the Secretary’s processing error and in the amount of approximately $200.

She cashed the check, not knowing what the check was for, and she put in her request for waiver that she had no idea that if she was wrong to keep the money or accept the money.

Obviously for her, the only way to effectively present her case as to whether or not she was wrong to accept or retain that money is for her to meet person-to-person with the decision maker and for him or her to assess Mrs. Yamasaki’s credibility and motivation.

Warren E. Burger:

What excuse could be offered for taking $200 more than the entitlement?

Stanley E. Levin:

Well, there are many situations, Your Honor, where the Social Security System issues checks, supplemental checks, or true active checks, adjustment checks in many situations where they can be appropriate to keep the money.

In any event, Congress —

Warren E. Burger:

On that, do you mean if there’s– if the check is — if the payment is $200 more than the recipient is entitled to, do you suggest there is any excuse for keeping, and any justification for keeping it?

Stanley E. Levin:

Your Honor, what I’m saying is Congress has made that choice.

Warren E. Burger:

Well —

Stanley E. Levin:

Congress has said they are going to — they are vested with this money until the Secretary comes forward and then shows these grounds under 204 (b) to take it away.

Congress has made that choice because Congress has reviewed the Social Security System and knows how difficult and how chaotic it is.

Warren E. Burger:

Well, do you suggest that either of not Courts below have made a determination or exhibited any great interest in 204 (b)?

Stanley E. Levin:

Well, they have to the extent that 204 (b) is a crucial element in weighing a private interest in this case.

And, 204 (b) is a crucial element in certain parts of the constitutional analysis.

We did present the argument at every stage of the appellant process that the Secretary’s recoupment procedures, as existed then, were absolutely barred by 204 (b).

The Court did not rule on it.

Warren E. Burger:

If we accept the figure and for the moment, for hypothetical purposes at least, let’s accept it that there’s $600 million a year being paid out that should not be paid out.

Do you mean to suggest that Congress had any notion that there should not be recoupment for the vast part of that, the overwhelming mat — portion of it?

Stanley E. Levin:

Congress said, Your Honor, in 1939 when it enacted this statute and 1967 when it affirmed it again, that persons who are without fault and against whom recovery calls a hardship will be able to keep the money.

Now, that $600 — $600million figure is consistent with the other statistics which the Secretary has just revealed — unveiled lately and which were never proved at the District Court level or the Circuit Court level in terms of an evidentiary hearing.

Stanley E. Levin:

If that is a correct figure, I think it’s basically irrelevant at a disposition in this case today.

You must look to the congressional intent and the congressional purpose and language at 204 (b).

Warren E. Burger:

Are you suggesting then, tangentially at least, that Congress contemplated that they would waive $600 million if that is the figure or any such figure?

Stanley E. Levin:

Congress —

Warren E. Burger:

Is that on any grounds?

Stanley E. Levin:

Congress was clearly saying, because they used the words “shall be no recovery,” Your Honor.

Warren E. Burger:

To the tune of $600 million, you press it that far?

Stanley E. Levin:

That’s what Congress said, Your Honor.

Obviously, it would not be to the tune of $600 million.

It never has been, and its guesstimates and speculation like that in the part of the Secretary.

Warren E. Burger:

So, this is purely hypothetical.

We don’t know whether that’s the fact.

Stanley E. Levin:

That’s the point.

Warren E. Burger:

We may or may not be able to notice it judicially, depending on what the records of the department show.

Stanley E. Levin:

We don’t know what the exact figure is, Your Honor.

It could be only $100,000.

The point is, Congress said, “We are going to set up a unique statutory scheme where there’s a limited group of Social Security recipients will be protected and they will be — that group will be people who are without fault and against whom recovery will cause a hardship or who detrimentally relied on this recovery or retention of the overpayment.

Thurgood Marshall:

Is there any other governmental provision that allowed people to keep money that didn’t belong to them?

Stanley E. Levin:

Absolutely, Your Honor.

There are a number of waiver provisions in a number of Civil Rights retirement statutes.

There are approximately, I think, 12 of them.

Thurgood Marshall:

Give me one statute that says that where you get money that you’re not entitled to, you shall keep.

Stanley E. Levin:

Well, the Civil Rights retire — Civil Right — Civil Service retirement statute, the railway retirements statute, and other similar retirement type statutes, also with the right for waiver provisions identical to the —

Thurgood Marshall:

Of waiver but, I mean, it’s not automatic.

Stanley E. Levin:

No, sir.

I’m sorry, I misunderstood you.

Thurgood Marshall:

I know it’s not.

It’s not for me, but the statutes you’re talking about.

Stanley E. Levin:

No, it’s the same —

Thurgood Marshall:

And I tried one time to get a client some money and failed.

Thurgood Marshall:

You have to best really learn what the statute means.

Stanley E. Levin:

Well, they are not automatic, Your Honors.

If you establish the conditions of a waiver, that’s what I’m trying to say.

Thurgood Marshall:

Well, this language, is that in any of the statute?

Stanley E. Levin:

The waiver language, to the extent that it protects a limited group of people under– as it did under 204, is applicable or app — exists in other retirements statutes, yes, sir.

Thurgood Marshall:

Name one.

Stanley E. Levin:

The Civil Service retirement statute and the railroad retirement statute are two examples I can think of.

Thurgood Marshall:

The railroad retirement statute says if you’re overpaid, you keep it?

Stanley E. Levin:

If you are without fault and you are in need.

Thurgood Marshall:

All without fault?

Well, what does that mean?

You didn’t have a gun?

Stanley E. Levin:

No, Your Honor, what that means is that you did not know or could not — did not know that the retention of the or acceptance of the overpayment was incorrect or erroneous.

William H. Rehnquist:

This would depend to a certain amount on the — to a certain established amount of the overpayment.

If your ordinary check is $200 and you get a check one month for $2,200, I suppose that finding a fault could be inferred.

Where it — if it’s a $10 or $20 difference, it couldn’t be.

Stanley E. Levin:

Well, some of those factual situations do arise, Your Honor.

The Secretary does make certain move — take certain steps to move recipients from various programs: from the disability program to the retirement program, from the survivor’s program to the retirement program.

And, when he does that, he sends out checks in recipient’s — correctly sends out checks.

So those, you often could not presume the mere sending of a check which is large is automatically an error.

William H. Rehnquist:

But if you’re used to getting a check for, say, $200 a month and you — suppose you get a check for $2,200 a m — the following month, would that support a finding of fault under the regulation?

Thurgood Marshall:

I think that would be one element to be considered at a personal confrontation.

Of course, you’d have to assess the credibility of that witness when the witness said, as in any credibility situation, that he or she did not know that what he or she was doing was incorrect.

What the Secretary’s regulations require, Your Honor, in response to your question, they require a very detailed assessment not only of that fact that you just articulated, but also the recipient’s age, intelligence, physical and mental condition, and a range of other factors to determine whether the recipient knew, should have known, or could have known that the retention or acceptance of the overpayment was wrong.

Harry A. Blackmun:

But it doesn’t say without knowledge.

It says without fault.

And, that would seem to imply some causative element and if the overpayment of $2,000 was not directly or indirectly caused by the beneficiary, how could he be with — have any fault about it?

Stanley E. Levin:

That has generally been our position, Your Honor, and we believe that the certain statute has made that determination because of using the language “fault,” but all I’m saying is that one factor to be considered, we think it should be given very little, if no weight.

Potter Stewart:

If the overpayment is not the fault of the beneficiary, then it’s not, whether or not he knew it was an overpayment.

Stanley E. Levin:

That’s correct, Your Honor.

Stanley E. Levin:

What is important to note, in response to your question, is that Congress knew that there were going to be many people overpaid and knew that there’d be many people — that, I mean, most of the errors we do the Secretary’s own errors and not the recipient’s generated errors.

Potter Stewart:

Enough, enough.

The overpayment is a result of misrepresentations on the part of the beneficiary, that’s clearly his fault.

Stanley E. Levin:

That’s correct.

Potter Stewart:

If an overpayment is a computer error or a miscalculation on the part of the agency, it’s not his fault at all.

Stanley E. Levin:

And most of the recipients before you today have exactly that situation.

Warren E. Burger:

Do you suggest that under — that there are any circumstances, and if so suggest what the circumstances would be, in which a $200 recipient received $2,200 and recoupment should not be automatic, virtually automatic?

No matter whose — let’s assume, obviously, that this is the error of the Secretary.

Are you telling us that that’s what the statute means, that the recipient could keep the $2,200 even though, for three or four years before, the check had been $200 a month?

Stanley E. Levin:

If to assessing the credibility of that individual, it is clear that individual was not at fault in generating or accepting that overpayment.

Byron R. White:

But fault is only one of the criteria.

Stanley E. Levin:

Its’ the first —

Byron R. White:

If has to be without fault and the recoupment must be — well, it must defeat the purpose of this subchapter or would be against equity in good conscience even if he’s faultless.

Stanley E. Levin:

That’s correct.

Byron R. White:

He has to satisfy that criteria.

Stanley E. Levin:

That’s correct, Your Honor.

I was just going to get to that.

Not only must he satisfy that, but it also must — if he has the money to be recovered, then the fault criteria will fall to the wayside.

You must be either be at– must be both be at fault — not at fault and you must be poor.

Under those two situations, you will get waiver.

If you don’t meet either those criteria, you do not get waiver.

Warren E. Burger:

But, then let me try to apply that.

Suppose the showing before the response was that, on receipt of the $2,200 instead of $200, he went out and lost the $2,000 gambling.

So that, when they come for the recoupment, he hasn’t got it.

Then, are you telling us that, under this statute, it would be inequitable and defeat the purposes of the Act to make him pay back the $2,200 over a period of time?

Stanley E. Levin:

Your Honor, are you presuming in your hypothetical that he is at fault and you’re directing it —

Warren E. Burger:

Just — just the facts I’ve suggested in the hypothetical.

Stanley E. Levin:

Well, in that situation —

Warren E. Burger:

He gambled away the $2,000.

Stanley E. Levin:

I think gambling is actually irrelevant, Your Honor.

Stanley E. Levin:

The question becomes one, again, if he was at fault or not at fault.

And, if he has the money, he may have other resources to recover from, the Secretary’s regulation require an in-depth financial evaluation of all pertinent circumstances and assets or resources of that particular recipient.

If that were the case, in fact, whether he gambled it away or lost it or it was stolen or he was robbed is absolutely irrelevant.

The question is whether he has these assets to satisfy the recoupment.

Warren E. Burger:

But if he squandered them away and has no other assets, you say then, under this statute, it would be inequitable.

The equity aspect of the statute, the second leg, would come into play and he should not have to return that money.

Stanley E. Levin:

As long as if he has — if he does not have any other resources or assets, the fact that he has or doesn’t have the money, no matter how that occurred is irrelevant, yes, sir.

Harry A. Blackmun:

Mr. Levin, could you help me with– I’m trying to find out in my own mind what the constitutional issue is in this case.

The question presented is whether an oral hearing must precede the reduction in the recoupment.

And, in the oral hearing, I had thought there was just the hearing before the LAJ, but it’s been made clear today that there are two different oral hearings that we’re talking about: an informal hearing and then there’s a later hearing before the LAJ.

Under your view, is the constitution satisfied with the informal hearing?

Stanley E. Levin:

Absolutely, Your Honor.

Harry A. Blackmun:

It is?

Stanley E. Levin:

Absolutely.

Harry A. Blackmun:

Now, do you understand that the government is asking to have that oral hearing dispensed with?

Stanley E. Levin:

Absolutely.

Harry A. Blackmun:

They don’t want even the informal hearing.

Stanley E. Levin:

That’s correct.

Harry A. Blackmun:

I see.

Stanley E. Levin:

That’s correct.

They don’t want — they do not want to continue what has been continuing for the last two-and-a half years in working satisfactorily.

They want to perhaps have the authority to go back to the old, very limited, very telescoped written submission procedure, which is absolutely inconsistent with the needs and capabilities of the these recipients.

Harry A. Blackmun:

If they want a right to change the regulations back to the way they use to be.

Stanley E. Levin:

Perhaps, Your Honor, we don’t know.

Harry A. Blackmun:

Other than that, there’s really no issue before us, isn’t that right?

Stanley E. Levin:

Well, the —

Harry A. Blackmun:

If they said they were satisfied to continue to provide the oral hearing, there will be no dispute.

Stanley E. Levin:

That’s right, Your Honor.

William H. Rehnquist:

Well, they wouldn’t have petitioned for certiorari, I presume.

Stanley E. Levin:

I don’t know why they petitioned for certiorari, Your Honor.

William H. Rehnquist:

Well, I presume because they just answered the Ninth Circuit’s opinion.

Stanley E. Levin:

I assume so.

William H. Rehnquist:

What — suppose the named plaintiffs here — suppose we agree with you to the extent of the interests of the named plaintiffs.

What relief will they achieve?

What would be their — what good will it do them?

Stanley E. Levin:

The named plaintiffs, Your Honor, in the Elliot proceeding have had their recoupments or action taken regarding their recoupment or their hearings halted pending the disposition of this litigation.

So, they still have a justiciable controversy.

So, if this Court were to rule that they had the right as to the two lower Courts and the Court of Appeals ruled twice —

William H. Rehnquist:

Then there will be a hearing before there’s a recoupment.

Stanley E. Levin:

That’s correct, Your Honor, there must be.

William H. Rehnquist:

Well, I thought you said there’d been recoupment hearings going on for two-and-a half years.

Stanley E. Levin:

As to other members of the class asking for — ironically, not as to most of the named plaintiffs.

William H. Rehnquist:

And suppose we agree with you, what else is involved in the case?

Stanley E. Levin:

Well, from our point —

William H. Rehnquist:

With respect to the named plaintiffs, what else do you need besides that?

Stanley E. Levin:

That’s the extent of our relief, Your Honor.

It’s all the–

William H. Rehnquist:

What about the class problem?

Stanley E. Levin:

Well, Your Honor, we believe that the Secretary has raised the jurist — the class problem as a jurisdictional problem.

We believe the Court of Appeals properly found that it could grant for relief under mandamus statute or under 205 (g).

We believe that’s an appropriate disposition of the case.

William H. Rehnquist:

Well, do you think the remedy the Court of Appeals ordered would be justified without finding that a class had been properly certified?

Stanley E. Levin:

Your Honor, this Court could.

William H. Rehnquist:

Could you say the injunction declaring the statute unconstitutional and enjoining it could be issued in behalf of just two named plaintiffs?

Stanley E. Levin:

I think it could, Your Honor, normally.

It’s not a matter of ruling the statute unconstitutional.

It’s if the Secretary’s procedure is pursuant to the statute.

The problem is, Your Honor, that the reason the class action and the injunction and relief are needed is been the Secretary’s conduct in a series of other litigations that he has not in fact followed rulings of the Courts of Appeals.

For example, in the decision of Califano versus White where there had been a spate of lawsuits filed in the same issue that the Court of Appeals in Califano versus White made in its determination.

William H. Rehnquist:

But this is by no means peculiar to the Secretary of HEW.

William H. Rehnquist:

The Commissioner of Internal Revenue struggles year after year to develop a conflict in the circuits, even though circuit after circuit will go against him.

And, the same is true of the other administrative agencies.

I don’t think any agency is held bound and take the opinion of one Court of Appeals out of 11 as the final arbiter of the constitution.

Stanley E. Levin:

Your Honor, first of all, there are two Courts of Appeals who ruled consistently here, the Third Circuit in Mattern versus Califano, and the Ninth Circuit.

William H. Rehnquist:

That’s out of 11.

Stanley E. Levin:

And there’s only two Courts in which the issue has been presented.

Secondly, the Secretary has only raised this issue about conflicts in the Circuits as a means of claiming that he would never be able to get review by this Court.

We are very confident that this Court can control its docket, and it’s calendar, and it’s — the matters which come before it.

And, we’ll see that if a matter is that impressing and important in the Courts rules and to Rule 19, that this Court will indeed review that issue and take appropriate action.

I think setting a decision or authorizing or — that there’d be no nationwide class actions in a situation like the case before you, we’re saying that the Secretary is correct in saying that the class actions under 1361 or under 205 (g) are inappropriate is an absolutely unworkable and unjust result to occur for this group of recipients.

It essentially makes Social Security recipients, Your Honor, second-class citizens.

Essentially says that they cannot get full relief in Federal Court on constitutional challenges to illegal procedures of the Secretary.

William H. Rehnquist:

It isn’t — why isn’t the Commissioner of the Internal Revenue’s program of seeking conflicts treat the taxpayers involved the same way?

Stanley E. Levin:

I have no knowledge of that, Your Honor.

I’m sorry.

Harry A. Blackmun:

Incidentally, is respondent Elliot out of the case?

Stanley E. Levin:

Yes, Your Honor.

Harry A. Blackmun:

Why — are you going to substitute somebody for him?

Stanley E. Levin:

You mean, we will take appropriate action to that Your Honor, yes.

There are several more —

Thurgood Marshall:

You have not prosecuted?

Stanley E. Levin:

No, sir.

There are several more points which I’d like to make in my remaining time.

As I was indicating earlier, the Secretary has made certain changes in his regula — in his procedures, his Claims Manual procedures which are not non-binding and are not part of the administrative regulations, and those procedures he claims are material to the disposition of the constitutional issue in balancing of the private interest in this case.

We believe that those changes are absolutely regressive and do not enhance a situation whatsoever because, actually, affirmatively discouraged persons and recipients concerning their right to waiver.

I can explain that in a moment, but what is important to us, Your Honor, is that if this Court in any way believes these changes are material to the disposition of this case.

We believe the case ought to be remanded back to the Courts — the District Courts which issued the injunctions in this case for them to prove the effect of any of those injunctions of those procedural changes.

We now think of this the way we should be discussing de novo these changed procedures in December of 1978, after six-and-a half years litigation, based on a particular system of recoupment.

Harry A. Blackmun:

Well, do you think, Mr. Levin, that the changes are — change the issues in this case?

Stanley E. Levin:

They certainly not provide the pre-recoupment opportunity to be heard, not the evidentiary hearing but the opportunity to be heard as required by the Court of Appeals.

Potter Stewart:

And that is the issue.

Stanley E. Levin:

That is the issue.

Potter Stewart:

And that remains the same issue even though —

Stanley E. Levin:

That’s correct, Your Honor.

Potter Stewart:

even if it changes, doesn’t it?

Stanley E. Levin:

That’s correct.

That issue is still there, but what these procedural changes do, Your Honor, unfortunately is a discouraged waiver assertions by clients because they actually ensure that clients who seek waiver will not get the maximum 25% partial adjustment protection.

A recovery against them is open-ended.

So, obviously, if I know that I can get a 25% maximum recovery, I’ll do that and I’ll forgo my statutory and perhaps constitutional right to have the case decided.

And, that is a direct and affirmative discouragement to its statutory right to waiver.

And it is because of that we’re — this certainly is a justiciable controversy, but we think the effect of that shall be litigated if the Court thinks that’s material in the lower Courts where it probably belongs.

To that end, we made a motion to dismiss or remand in this case in January, but it was denied.

We renew that request now, if the Court deems these procedures material.

Byron R. White:

What’s — if you say that everybody but the named plaintiffs have been getting recoupment hearings in accordance with the decision of the Court of Appeals for two-and-a half years, what’s left of the class?

Stanley E. Levin:

Well, people who come forward on an ongoing basis, Your Honor.

If this Court were not to rule on our f —

Byron R. White:

This is a constantly revolving class.

Stanley E. Levin:

That’s — yes, sir, it is because the Secretary issues these recoupment notices daily.

He issues 1.25 million of them a year, most of which are his errors.

In that vein, therefore, there are people who are regularly trying to assert their right to waiver.

I would like to make a point here though, Mr. Justice White.

The point is that the notice aspect of this case which counsel indicated was not before this Court is an important thing to keep in mind because both the lower Courts and the Ninth Circuit found that people were not properly informed of the right to waiver.

Because of that, many of them did not exercise certain statutory and constitutional rights they would’ve certainly otherwise done.

The Secretary has not appealed that and that’s res adjudicada.

And, that is an essential difference between this case and certain other cases where you would require exhaustion of administrative remedies and be concerned about the class definition because, in this case, there are fundamentally constitutionally defect of notice where persons could not have exhausted, could not have asserted their rights because they didn’t know what their rights were and I think the maneuver by the Secretary not to appeal that decision, I do not want that to relieve this Court of —

Byron R. White:

If we agreed with you and said, on behalf of the named plaintiffs, the named plaintiffs were entitled to a declaratory judgment that whatever that’s attacked here was unconstitutional.

Do you need anything else than that?

Stanley E. Levin:

Your Honor, again, I go back to my answer to a question of Mr. Justice Rehnquist.

The problem with that, to the extent that you authorize or approve of or acquiesce in the Secretary’s position that Social Security recipients are not entitled to class actions in a Federal Court for procedural constitutional attacks or statutory attacks like Califano versus–

Byron R. White:

Like the — sort of a general, it may or may not be involved in this case.

Byron R. White:

If the very provision you’re attacking here is declared to be unconstitutional, what more do you need?

Stanley E. Levin:

I assume the Secretary would abide by the decision of this Court and, if he did that, we would not need anything further, Your Honor.

Warren E. Burger:

So ten million or more who received checks every year, several millions perhaps, culminate some of the check act.

Does this record show how many people send the check back and say there “Mr. Secretary, you made a mistake.

I’m not entitled to all this money”?

Anything —

Stanley E. Levin:

We have no idea, Your Honor.

We have no idea.

Potter Stewart:

Did you get a copy of the petitioner’s reply brief?

Stanley E. Levin:

Yes, we did, Your Honor.

Potter Stewart:

It is referred to in oral arguments this morning.

Until that reference was made, I didn’t know there was one.

It was filed only last Friday.

Stanley E. Levin:

Yes, Your Honor, we got it at the last minute also.

And, we reviewed it and we think it’s the first occasion which the Secretary —

Potter Stewart:

It goes to the statutory —

Stanley E. Levin:

Absolutely, Your Honor.

It was six years and we raised it in the lower Courts, in the complaints.

We raised it in the Appellate Court.

We’ve briefed it, and the Secretary has ignored it and treated as though it did not exist because he has —

Potter Stewart:

Also the Court of Appeals?

Stanley E. Levin:

The Court of Appeals recognized it, Your Honor, for the importance of balancing the private interest in this case, recognizing that it was a congressional mandate that there shall be no recoupments only in these certain limited situations.

Potter Stewart:

Yes, the Court of Appeals ignored the claim that the statute itself requires a prior hearing.

Stanley E. Levin:

Well —

Potter Stewart:

And, instead, said the constitution requires one.

Stanley E. Levin:

That’s correct, Your Honor.

We — we would be — we would take the position that we believe an affirmance is absolutely appropriate in this case, but that if the Court believes it necessary, we could go back to the Court of Appeals and litigate the statutory issue because we believe it’s an essential issue in this case.

As this Court has indicated in many occasions, it’s the first duty of any reviewing Court to try to dispose of any constitutional issue without reaching the constitutional issue and first disposing on the statutory grounds, which can be done in this case.

Byron R. White:

Well, if we affirmed on the statute, would that change your relief?

Stanley E. Levin:

I don’t think so, Your Honor.

Byron R. White:

So, I suppose, you could say you’re entitled to urge the statutory ground now, here.

Stanley E. Levin:

Well, that’s what we’re doing, Your Honor, and we briefed it thoroughly.

We briefed it thoroughly, although we have — if the Court believes that it’s essential for them to have the thoughts and disposition of the lower Court, we are willing to go back and litigate that issue there at that time.

Thank you, Your Honor.

Warren E. Burger:

Very well.

Thank you, Gentlemen.

The case is submitted.

We’ll hear arguments next in —