U.S. Court of Appeals for the 7th Circuit
Public Health — disability benefits — judicial review
A disability claimant is entitled to an opportunity to show good cause for not requesting a hearing after a denial of benefits.
“We conclude that Watters is wrongly decided. We recognize that there is an established conflict on this issue, with McNatt and Shrader favoring Boley and a greater number of circuits, including Rios (see page 3 above) and the panel in Watters, the other way. Watters relied on Ortego v. Weinberger, 516 F.2d 1005, 1007–08 (5th Cir. 1975), and Cappadora v. Celebrezze, 356 F.2d 1, 4 (2d Cir. 1966). Cappadora long preceded both Salfi and Eldridge; Ortega came between those cases and did not discuss Salfi other than to observe that 28 U.S.C. §1331 does not supply jurisdiction in Social Security cases. Yet neither the Second Circuit nor the Fifth Circuit has changed course after Eldridge. The Sixth and Tenth Circuits have adopted the same view, see Hilmes v. Secretary of HHS, 983 F.2d 67 (6th Cir. 1993); White v. Schweiker, 725 F.2d 91 (10th Cir. 1984). The Third Circuit has held that constitutional arguments, but not others, can be entertained when the agency does not hold an oral hearing. Penner v. Schweiker, 701 F.2d 256, 260 (3d Cir. 1983).”
“The prospect of moving from one side of a conflict to another is not attractive, especially when the conflict is so old and the Supreme Court has been content to allow the disagreement to continue. Nonetheless, we have a duty to apply §405(g) the way the Supreme Court did in Salfi and Eldridge, and we very much want to give the statute a reading that avoids unnecessary constitutional litigation of the kind that Watters and similar decisions invite.”
Vacated and Remanded.
Appeal from the United States District Court for the Southern District of Indiana, Young, J., Easterbrook, J.