823 F.

2d 669

18 Soc.Sec.Rep.Ser. 422, Unempl.Ins.Rep. CCH 17,822

Constance DION, Plaintiff, Appellee,
v.
SECRETARY OF HEALTH AND HUMAN SERVICES,
Defendant, Appellant.
No. 87-1137.

United States Court of Appeals,

First Circuit.
Submitted June 5, 1987.
Decided July 9, 1987.

John Aronson, Asst. Regional Counsel, Dept. of Health and Human

Services, Richard V. Weibusch, U.S. Atty., and Gretchen Leah Witt, Asst.
U.S. Atty., Concord, N.H., on brief for defendant, appellant.
Ellen L. Gordon, New Hampshire Legal Assistance, Manchester, N.H., on
brief for plaintiff, appellee.
Before BOWNES, BREYER and TORRUELLA, Circuit Judges.
BOWNES, Circuit Judge.

The United States Secretary of Health and Human Services, defendantappellant, appeals from a judgment in favor of Constance Dion, plaintiffappellee, by the United States District Court for the District of New Hampshire.
The district court reversed the Secretary's decision to offset a retroactive
payment of Social Security Disability Insurance (SSDI) by the amount of
Supplemental Security Income (SSI) for the same period, pursuant to 42 U.S.C.
Sec. 1320a-6 (1982). We affirm the district court.

I.
2

A disabled person may qualify both for SSDI under Title II of the Social
Security Act and for SSI under Title XVI of the Act. Eligibility for SSDI

depends on the insured person's contributions and insured status, 42 U.S.C. Sec.
423(a)(1), (c)(1) (1982); SSI provides a minimum income for disabled people
based on need, 42 U.S.C. Sec. 1382(a)(1), (c)(1) (1982).
3

In determining a person's eligibility for SSI, the agency considers her resources
and any income received during the relevant quarter. Such income may include
any SSDI benefits received during that period. Prior to the adoption of section
1320a-6, individuals whose SSDI checks were delayed for any reason would
not have their SSDI income considered when the agency determined their
eligibility for SSI payments for that period. Thus, when a person finally
received a retroactive SSDI check, she could, in some cases, have received full
benefits for both programs for the same period.

On June 9, 1980, Congress adopted Pub.L. 96-265, Sec. 501, 94 Stat. 469
(1980), codified at 42 U.S.C. Sec. 1320a-6 (1982).1 The new statute provided
that a person's entitlement under the two programs was to be considered as a
totality: a retroactive SSDI check would be offset by the amount of SSI that
would not have been paid if the SSDI benefits had been paid when they were
regularly due.

The issue presented by the present case concerns the retrospective application
of section 1320a-6 to SSDI claims that were filed and would have been
regularly paid prior to the effective date of the statute but whose actual
payment was delayed until after that date. In accordance with Pub.L. 96-265,
Sec. 501(d), 94 Stat. at 470, the new offset provision did not go into effect
immediately upon its passage in June, 1980. Rather, the offset provision was
declared to be applicable to cases in which "entitlement for [SSDI] is
determined on or after [July 1, 1981]." The parties to this appeal dispute the
meaning of this provision.

II.
6

The facts material to this appeal are undisputed; the procedural history, though
complicated, bears recounting in some detail. Dion originally applied for both
SSI and SSDI benefits in June, 1977. Her applications were denied both
initially and upon reconsideration. She did not appeal this denial. She reapplied
for both programs in November, 1979. Due to administrative error, involving
the inability of the agency to locate Dion's folder, her application was not
completed until August, 1980. She was, however, granted "protective filing";
her application was considered filed as of November, 1979. In October, 1980,
Dion was denied both SSDI and SSI benefits. In January, 1981, the agency
reconsidered her SSI application and again denied it. In June, 1981, Dion was

informed that her SSDI claim was also denied upon reconsideration, although
the determination had actually been made more than four months earlier.2
7

In February, 1982, an Administrative Law Judge (ALJ) ruled that Dion had
been disabled as of May 5, 1977. The ALJ reopened Dion's June, 1977,
applications for SSI and SSDI; he ruled that Dion was entitled to receive both
benefits based on the 1977 applications. In April, 1982, Dion began receiving
her regular monthly SSDI check; she was ineligible for SSI benefits because of
this SSDI income. On July 27, 1982, Dion received a retroactive check for
benefits improperly denied between 1977 and 1982. The check included: (1)
full SSDI benefits from November, 1977, through November, 1979; (2) SSDI
benefits offset by the concurrent SSI benefits from November, 1979, through
February, 1982; and (3) full SSI benefits from November, 1979, through
February, 1982. The check did not include SSI benefits from June, 1977,
through November, 1979, despite the ALJ's decision.

In May, 1983, the Appeals Council reopened the ALJ decision and denied Dion
SSI benefits from June, 1977, through November, 1979. In April, 1984, the
district court ruled that the Appeals Council had illegally reopened Dion's case.
The court ordered payment of SSI benefits from June, 1977, through
November, 1979. See Dion v. Secretary of Health and Human Services, Civ.
No. 83-442-D, slip op. (D.N.H. April 25, 1984). Dion had also sought judicial
review of the offset of her SSDI benefits from November, 1979, through
February, 1982, by her SSI benefits for the same period. The court, however,
ruled that Dion would have to exhaust her administrative remedies on this issue
before it could be properly presented for judicial review.

Having exhausted her administrative remedies, Dion returned to district court.

The court, following its earlier decision in Hey v. Schweiker, No. C. 81-341-L,
slip op. (D.N.H. October 5, 1982), ruled that the offset had been improperly
applied. The court held that the law governing Dion's case is the law that was
in effect at the time she "would have begun receiving benefits had the [Social
Security Administration] ruled correctly initially." The date at which Dion
would have begun receiving the benefits at issue was November, 1979.
Accordingly, the court ruled that section 1320a-6, which became effective in
July, 1981, did not apply to the retroactive SSDI payment. The Secretary
appeals this decision.

III.
10

The issue in this case concerns the retrospective effect of section 1320a-6 on
claims filed before the statute went into effect. We begin our analysis,

therefore, with the general principle governing the retrospective effect of

statutes:
11 first rule of construction is that legislation must be considered as addressed to
[T]he
the future, not to the past.... [A] retrospective operation will not be given to a statute
which interferes with antecedent rights or by which human action is regulated, unless
such be "the unequivocal and inflexible import of the terms and manifest intention of
the legislature."
12

Union Pacific R.R. v. Laramie Stock Yards Co., 231 U.S. 190, 199, 34 S.Ct.
101, 102, 58 L.Ed. 179 (1913) (citations omitted). Accord Greene v. United
States, 376 U.S. 149, 160, 84 S.Ct. 615, 621, 11 L.Ed.2d 576 (1964). In order to
attribute retrospective effect to a statute, "there must be found expression of the
legislative will in terms so plain as to admit of no doubt that such was the
intention." Elliot v. Volpe, 328 F.Supp. 831, 835 (D.Mass.1971).

13

Section 501(d) of Pub.L. 96-265, 94 Stat. at 470, states that the offset provision
"shall be applicable in the case of payment of monthly insurance benefits under
title II of the Social Security Act entitlement for which is determined on or after
the first day of the thirteenth month which begins after the date of the
enactment of this Act." The conflict over the meaning of this provision arises in
cases, such as the present one, that were initiated before July 1, 1981, but that
were not finally adjudicated by the agency and the courts until after that date.

14

In the phrase, "entitlement for which is determined on or after [July 1, 1981],"

the Secretary stresses the word "determined" and interprets that word as
synonymous with "finally adjudicated." The Secretary claims that the law
controlling these cases is the law in effect on the final "adjudication date"; the
Secretary defines "final adjudication" as the date of the signing of the award
authorization by the claims authorizer. According to the Secretary, this date
"unambiguously fixes the time when such a determination has been subject to
final review" by him.

15

We do not, however, find any language in the statute that would indicate that
"determined" refers to the "final adjudication" rather than to an earlier stage of
the proceedings. Moreover, at least at one point, the Secretary's own
regulations define "determination" as "the initial determination or the
reconsidered determination," 20 C.F.R. Sec. 404.901 (1986), rather than the
exhaustion of all administrative and judicial avenues. Finally, there is nothing
in the offset provision that mentions the signing of the award authorization.

16

The district court, following its decision in Hey, interpreted the word

16

The district court, following its decision in Hey, interpreted the word
"determination" in relation to "entitlement." This interpretation views the
controlling date as that on which the claimant's eligibility was initially
determined, not the time of final adjudication. Thus, under this interpretation,
section 501(d) means that the offset provision does not apply to individuals
whose determinations as to entitlement to benefits (including erroneous
determinations of noneligibility) were made before July 1, 1981. Accordingly,
the district court concluded that it was "compelled to award benefits to [Dion]
without offset simply because the statute in question (Sec. 1320a-6) was not in
effect when [she] was determined to be eligible."3

17

We agree with the district court's reading of the statute in light of the general
rule, cited above, against finding retrospectivity in statutes absent an
unambiguous declaration to the contrary. In addition, there are two other
considerations we find persuasive. First, the thirteen-month postponement by
Congress of the effective date of the statute shows a clear intent to obviate any
retrospective application. The Secretary argues that the postponement shows,
on the contrary, that Congress intended to limit the protection against
retrospective application to claims finally adjudicated before July 1, 1981. We
cannot accept this view; the legislative history, as well as logic, militate against
it. The Senate Committee report clearly states that "[t]he committee expects
that the department will ensure that applicants are made aware [the offset] is
required by law at the time they file their claims for benefits." S.Rep. No. 96408, 96th Cong., 2d Sess. 78, reprinted in 1980 U.S.Code Cong. & Ad.News,
1277, 1356 (emphasis added). The Department could not have made Dion
"aware" of the offset provision at the time of her application because the
provision did not yet exist. The clear statement in the legislative history and
Congress' postponement of the effective date show a manifest intent to bar any
retrospective application. We can carry out this intent by interpreting the word
"determined" in section 501(d) with reference to the date of initial
determination in respect to "entitlement" rather than to the date of "final
adjudication."

18

Secondly, the Secretary's interpretation would lead to an unacceptable disparity

between claims based on the luck of a particular applicant in pushing her claim
through the sometimes frustratingly slow administrative and judicial process.
This factor played a role in the district court's reasoning in Hey, slip op. at 3.
The present case further illustrates the arbitrary results that could ensue. Dion
originally applied for benefits in June, 1977. She reapplied in November, 1979.
Due to the agency's error in misplacing her folder, her application was not
processed until August, 1980. While the "protective filing" meant that her
application was constructively viewed as completed in November, 1979, the
delay pushed the ultimate adjudication of her claim much closer to the

"effective date" of the statute. If not for the agency's inefficiency, her claim
might have been resolved much earlier. In addition, Dion was not informed of
the denial of her request for reconsideration of her SSDI claim until June, 1981.
Finally, we note that the ALJ took the extra step of reopening her 1977
application on the grounds that it had been erroneously denied. Thus, Dion
struggled for nearly five years to obtain administrative recognition of a
disability that began in 1977. Without a strong, explicit legislative statement to
the contrary, simple justice dictates that she should not suffer for the agency's
delays and errors in handling her case.
19

The Secretary argues that we should follow his interpretation of the statute on
the general principle that courts should defer to an agency's interpretation when
that agency is charged by the statute with its administration. We agree with the
principle as a general rule; there are limits, however, to this deference. The
"courts are the final authorities on issues of statutory construction."
Volkswagenwerk Aktiengesellschaft v. Federal Maritime Commission, 390
U.S. 261, 272, 88 S.Ct. 929, 935, 19 L.Ed.2d 1090 (1968). The deference due
an agency's interpretation depends, in the first instance, on whether the matter
is more properly viewed as within the agency's expertise or, on the contrary, as
a clearly legal issue that courts are better equipped to handle. See McCuin v.
Secretary of Health and Human Services, 817 F.2d 161, 167-168 (1st Cir.1987).
In addition, where the agency's interpretation would conflict with the
congressional policy underlying the statute, or where there are "compelling
indications" that the agency is wrong, courts should apply their own judgment.
Espinoza v. Farah Mfg. Co., 414 U.S. 86, 94-95, 94 S.Ct. 334, 339-340, 38
L.Ed.2d 287 (1973).

20

This case presents a clearly legal issue, concerning the retrospective application
of a statute, which is covered by a Congressional policy both implicit in the
statute and explicit in the legislative history. Under these circumstances, we do
not find it inappropriate to exercise our own interpretive reasoning in reading
the statute.4

21

Affirmed.

The statute was amended again in July, 1984, see 42 U.S.C. Sec. 1320a-6
(Supp. III 1985), but this amendment is not relevant to the present case

These facts are taken from Dion v. Secretary of Health and Human Services,
Civ. No. 83-442-D (D.N.H. April 25, 1984), slip op. at 2

Both parties cite the only reported case dealing, at least indirectly, with the
issue presented here. In Fagner v. Heckler, 779 F.2d 541, 543 (9th Cir.1985),
the court rejected the Secretary's view that the controlling date is that of the
signing of the award certificate. It found that the claimant was "entitled" to her
benefits prior to July, 1981, because an unappealed ALJ decision had issued in
June, 1981. Fagner, however, does not directly address the issue presented here
and may be cited both for and against the district court's ruling. When the
Fagner court considered the date of the ALJ decision as the relevant date, it
might, on the one hand, have considered that date to be definitive; on the other
hand, it might have stopped its analysis at that point because that date was
already within the July, 1981, deadline. Thus, it had no need to decide whether
an earlier "entitlement" date might also suffice to escape the provisions of Sec.
1320a-6. The Fagner court's stress on the word, "entitlement," suggests that the
logic of its opinion would support the district court here. The court cited a
dictionary definition of "entitlement" as "to give right or legal title to, qualify
(one) for something, furnish with proper grounds for something." Id. (citations
omitted). We note that "entitlement" for disability benefits begins with the first
month covered by the application in which the eligibility requirements are met.
20 C.F.R. Sec. 404.316(a) (1986)

Like the district court, we have decided this case on the grounds that Sec.
1320a-6 should not be applied retrospectively; thus, like the district court, we
do not reach the issue of whether Sec. 1320a-6 applies generally to concurrent
SSDI and SSI benefits. Cf., e.g., Detson v. Schweiker, 788 F.2d 372 (6th
Cir.1986)