Stieberger v. Heckler

TABLE OF CONTENTS

I. INTRODUCTION 1321

II. FACTS 1323

III. MOTIONS CONCERNING INDIVIDUAL NAMED PLAINTIFFS 1325

A. Defendants’ Motion to Remand (Stieberger) 1325

B. Motions to Intervene (Happy, Vega) 1326

C. Motions to Consolidate (Sullivan, Johnson) 1326

IV. CLASS CERTIFICATION 1327

V. JURISDICTIONAL ISSUES 1328

A. Social Security Act Jurisdiction: Section 405(g)

1. Presentment 1329

2. Exhaustion 1329

3. Sixty Day Limitation 1330

B. Mandamus Jurisdiction: Section 1361 1334

C. Standing of City of New York 1337

VI. PRELIMINARY INJUNCTION 1340

A. The Standard 1340

B. Irreparable Harm 1341

C. Likelihood of Success on the Merits 1342

1. Non-Acquiescence 1342

a. Non-Acquiescence in Second Circuit Precedent 1343

b. Congressional Ratification of Defendants’ Treating Physician Rule 1349

c. The Legality of Non-Acquiescence 1350

(i) The Original Non-Acquiescence Policy 1351

(ii) Interim Circular No. 185

d. Propriety of Injunctive Relief 1375

2. Bellmon Review 1376

a. Introduction 1376

b. Legal Issues 1379

(i) Standing 1380

(ii) Mootness 1981

(iii) Waiver 1381

(iv) The Legality of Bellmon Review 1386

(a) The Bellmon Amendment 1388

(b) Justification for Agency Focus on Allowance Decisions 1390

(c) Evidence of Bellmon Review’s Impact on ALJ Impartiality 1393

Conclusion 1398

1399 VII. RELIEF

*1321 appendix

A. Order

B. Papers Filed by Parties in Connection with Motions

C. Interim Circular No. 185

OPINION

I. INTRODUCTION

Plaintiffs, Theresa Stieberger and the City of New York, have instituted this action to challenge two policies of the United States Department of Health and Human Services (“HHS”) and the Social Security Administration (“SSA”), as implemented by the abovenamed defendants. 1 Plaintiffs challenge: (1) the “non-acquiescence” policy, under which Administrative Law Judges (“AUs”) have been instructed to disregard the decisions of federal courts within the circuit in which they sit when those decisions conflict with the Secretary’s own policies; and (2) the “Bellmon Review” policy, under which, inter alia, the decisions of AUs with a high percentage of pro-claimant determinations in disability benefit cases were subject to agency-initiated review by the agency’s Appeals Council.

Plaintiffs contend .that the non-acquiescence policy has deprived them of access to impartial and decisionally independent AUs and has unlawfully discriminated between those claimants who are able to secure judicial review and those who do not have access to judicial review in violation of the Administrative Procedure Act (“APA”), the Social Security Act, the Due Process Clause of the Fifth Amendment to the United States Constitution, and the principle of separation of powers. Plaintiffs contend that the Bellmon Review policy has deprived them of access to impartial and decisionally independent AUs in violation of the APA, the Social Security Act, and the Due Process Clause of the Fifth Amendment to the United States Constitution and has unlawfully discriminated against disability benefits claimants in violation of the Due Process Clause of the Fifth Amendment 2 by subjecting AU decisions to Bellmon Review because such decisions are unfavorable to the government. Plaintiffs seek declaratory and injunctive relief pursuant to 28 U.S.C. §§ 2201 and 2202.

Six motions are presently pending before this Court. Plaintiffs’ four motions were filed on October 23, 1984. First, Patricia Happy and Angel Vega have moved pursuant to F.R.Civ.P. 24 to intervene. Second, Milagros Sullivan and Harold Johnson have moved pursuant to F.R.Civ.P. 42 to have their cases consolidated with the above-captioned action. Third, plaintiffs 3 have moved pursuant to F.R.Civ.P. 23 to certify this action as a class action. Fourth, plaintiffs have moved pursuant to F.R.Civ.P. 65 for a preliminary injunction (1) enjoining defendants from continuing their Bellmon Review and non-acquiescence policies, (2) notifying agency employees and their agents who adjudicate disability claims in New York that they are to decide cases in accordance with the precedents of the United States Court of Appeals for the Second *1322 Circuit, (3) an order granting the individual named plaintiffs interim benefits pending final judgment; 4 and (4) ordering defendants to (a) identify class members, (b) notify them that their denial or termination of benefits may have been wrongful, 5 and (c) develop a procedure for claimants to renew their claims. 6

On October 4, 1984, defendants moved pursuant to 42 U.S.C. § 405(g) to remand plaintiff Stieberger’s case to the Secretary. Defendants subsequently moved on February 4, 1985 to dismiss pursuant to F.R. Civ.P. 12(b)(1) and (6) or alternatively for summary judgment pursuant to F.R.Civ.P. 56. Defendants’ motion to dismiss or for summary judgment seeks to dismiss the Bellmon Review claim in its entirety based on lack of standing, mootness, waiver, and on the merits, and seeks to dismiss the non-acquiescence claim on mootness grounds based on alleged congressional ratification of the Secretary’s policy for evaluating the opinion of a claimant’s treating physician. See Defendants’ Memorandum of Law (i) In Support of Motion to Dismiss, etc., at 2, 12-24. 7

On February 4, 1985, oral argument was held on the aforementioned motions. At that time, the Court directed counsel for defendants to secure a review of the SSA’s non-acquiescence policy by officials at the highest levels of HHS and to submit a supplemental memorandum concerning the legal issues raised by the policy. See Transcript of Oral Argument (“Tr. I”) 52, 58, 64. After a review of the policy by the Undersecretary of HHS, the Acting Commissioner of Social Security and the Acting General Counsel of HHS, defendants filed their Memorandum Concerning Instruction to Administrative Law Judges on March 4, 1985. The Court also requested plaintiffs to address the issue of the scope of the proposed class and to give consideration to whether the proposed class definition could be narrowed so as to exclude claimants whose claims were denied for reasons unrelated to the issues in this case. Tr. I 22-23.

By order dated March 8, 1985, plaintiffs’ class certification and preliminary injunction motions were referred to Magistrate Naomi Reice Buchwald for report and recommendation. After conducting an oral argument on April 1, 1985, see Transcript of Oral Argument (“Tr. II”), the Magistrate issued her report and recommendation on May 8, 1985. The Magistrate recommended that plaintiffs’ motion for class certification be granted and that plaintiffs’ motion for preliminary injunctive relief enjoining defendants from continued implementation of the Bellmon Review and non-acquiescence policies be granted as well. The Magistrate also recommended that defendants be ordered to identify with reasonable promptness all members of the class.

On June 3, 1985, defendants filed objections to virtually all of the Magistrate’s Report. 8 Plaintiffs filed responsive papers on .June 21, 1985, in which they essentially objected to that portion of the Magistrate’s Report concerning defendants’ alleged non- *1323 acquiescence in Second Circuit predecent concerning the evaluation of a claimant’s complaints of pain. Defendants filed a supplemental memorandum on July 15, 1985 concerning recent developments in two cases which are relevant to this action and a reply memorandum on July 16, 1985 in response to plaintiffs’ responsive papers. Pursuant to 28 U.S.C. § 636, we have reviewed de novo those portions of the Report to which objection has been made. 9

For the reasons set forth below, (1) Patricia Happy’s motion to intervene is granted and Angel Vega’s motion to intervene is dismissed as moot; (2) the motion to consolidate the cases of Milagros Sullivan and Harold Johnson with this action is granted; (3) the motion to certify this action as a class action is granted as set forth in the Order issued in conjunction with this Opinion (Appendix A); (4) the motion to enjoin the defendants’ current non-acquiescence policy is granted under the terms set forth in this Court’s Order; and (5) the motion to enjoin the defendants’ current Bellmon Review program is denied. Defendants’ motion to dismiss, or in the alternative for summary judgment, is denied, and defendants’ motion to remand plaintiff Stieberger is denied.

II. FACTS

In light of the Magistrate’s thorough and helpful description of the facts and administrative review process and the absence of objections thereto, we hereby adopt and set forth this portion of the Magistrate’s Report:

“FACTUAL BACKGROUND

The Individual Plaintiffs

“This action was originally commenced by plaintiff Theresa Stieberger pro se on February 23, 1984. On August 3, 1984, before defendants had answered the Complaint, an Amended Complaint was filed as of right by plaintiff Stieberger, individually, and on behalf of all similarly situated persons who had been denied disability benefits, and by the City of New York. Two other individual plaintiffs, Patricia Happy and Angel Vega, moved to intervene in this action on behalf of themselves and all others similarly situated. In addition, individual plaintiffs Milagros Sullivan and Harold Johnson seek to have their cases consolidated with this pending action. 4 ('‘Plaintiffs assert that Judge Sand’s order granting interim benefits constitutes a de facto denial of defendants’ motion for remand filed on October 4, 1984 and a grant of the motions for intervention and consolidation. Tr. II 97-98.) A brief description of the individual plaintiffs and their claims follow.

“Theresa Stieberger is 54 years old, and was first given SSI benefits because of mental problems in 1974. In 1978, she missed an appointment with a consulting physician because her son was ill, and her benefits were cut off. Not allowed to reapply immediately, she reapplied on April 7, 1983 for SSI and SSDI benefits. Her applications were rejected on June 21, 1983 and after two reconsiderations, she appeared pro se before an AU for a hearing [held in July 1983]. In August, 1983, the AU rendered a decision against Mrs. Stieberger. He rejected the determination of her treating physician that she was totally disabled by degenerative joint disease in the lower thoracic and lumbar spine, calcific peritendonitis of the right shoulder that prevented her from lifting her right arm, depression, and asthma. Amended Complaint, Ex. II, AU Decision at 3. The Appeals Council also rejected her claim. Mrs. Stieberger alleges that she is in constant pain and cannot work. Her 15 year old son does the shopping and heavy housework. They live on $237 in welfare payments and $135 in food stamps per month. See Stieberger Aff.Ex. C.5 (5 Each of the affidavits of the individual plaintiffs is annexed to the affidavit of Mary McCorry, sworn to on October 22, 1984, submitted in support of plaintiffs’ notice of motions.)

*1324 “Patricia Happy suffers from severe back pain and muscle spasms caused by degenerative joint disease and a leg injury received in a motorcycle accident. Ms. Happy alleges that she is unable to cook, clean, wash, iron, or do other basic household chores. The New York City Department of Social Services found her disabled and provided a housekeeper to perform those chores for her. Ms. Happy must lie in bed for most of the day. She applied for disability benefits on August 19, 1983. After her application and request for reconsideration were rejected, she requested a hearing before an AU. Ms. Happy did not attend the hearing [held in May 1984] and was not represented by counsel. Plaintiffs assert that in a decision contrary to the detailed reports of Ms. Happy’s treating physicians, the AU relied on the government physician’s examination report to reject her claim on June 14, 1984. Ms. Happy’s appeal to the Appeals Council was denied on January 23, 1985. See Happy Aff.Ex. D.

“Angel Yega is an eleven-year old retarded boy with severe asthma and emotional problems. His mother applied for SSI on his behalf on October 28, 1982. In February, 1983 the SSA rejected the application and rejected his request for reconsideration in November, 1983. Denying his request after a hearing on July 2, 1984, an AU apparently rejected the uncontradicted reports of Angel’s treating physicians. On December 10, 1984 the Appeals Council granted Angel benefits. He has received no payments, however, and his public assistance and Medicaid were terminated as of the date of notification. Angel, his mother, father, and his three siblings live on $78 for rent and $156 for the rest of their expenses every 15 days, plus $193 in food stamps every month. See Vega Aff.Ex. E.6 (6 Because Angel has not received any payment on his award, his counsel has requested that his claim not be found moot. Kubitschek Aff., sworn to on January 31, 1985.)

“Plaintiff Milagros Sullivan suffers from constant pain in the lower right back and right leg caused by a spinal tap administered during childbirth in 1972. Her treating physician testified that she lives in acute pain, is unable to move and is confined to bed. She applied for SSI on October 6, 1982. After her application and request for reconsideration were rejected, she had a hearing before an AU on January 17, 1984. According to plaintiffs, in a decision contrary to the findings of Ms. Sullivan’s treating physician and two consulting physicians, the AU relied on the findings of a third consulting physician in denying her claim. The Appeals Council also rejected her claim. She and her 12 year old daughter live on $399 in public assistance and $98 in food stamps each month. See Sullivan Aff.Ex. F.

“Harold Johnson has polymyositis, a rare disease that causes extreme fatigue, muscle weakness and shortness of breath. Mr. Johnson applied for SSI on December 2, 1982. His application and request for reconsideration were rejected by SSA. After a hearing, on March 30, 1984, plaintiffs assert that the AU rejected his claim without directly confronting the treating physician’s findings that he was disabled. The Appeals Council denied his request on September 11, 1984. Mr. Johnson lives on welfare payments of $268 monthly, $60 food stamps monthly, and on money borrowed from his church. See Johnson, Aff.Ex. G.

The Administrative Review Process

“To place this case in context, we will briefly describe the administrative process for reviewing applications for disability benefits, which is essentially the same whether the request is for Social Security Disability Insurance (“SSDI”) under Title II of the Act or for Supplemental Security Income (“SSI”) under Title XVI of the Act. The administrative process for determining social security claims as established by the statute and implementing regulations consists of four levels of administrative consideration, followed by three levels of judicial review.

“First, the claim is reviewed by a state agency. 42 U.S.C. § 421(a). The Secretary may on her own motion review the state agency’s initial determination of disability *1325 or lack of disability, either before or after any action is taken to implement that initial determination. 42 U.S.C. § 421(c).

“Next, the claimant may ask the state agency to reconsider the claim de novo, with the decision upon reconsideration again reviewable by the Social Security Administration. 20 C.F.R. § 404.907 (1982).7 (7 If the initial determination is that the disability has ceased due to medical reasons, and the claimant has a right to a hearing on the same issue in connection with a claim for SSI, the claimant need not request reconsideration, but may request a hearing right after the initial determination. 20 C.F.R. § 404.907 (1982).)

“If the claimant is dissatisfied with the reconsideration outcome, he may request a de novo hearing before an AU. At the hearing, the claimant may appear in person, submit new evidence, examine the evidence used in making the determination or decision under review, and present and question witnesses. The hearing is not adversarial, and the ALJ who conducts it may ask the claimant questions. At the hearing, the SSA is not represented by counsel. The claimant may be represented by counsel or other representative such as a paralegal. Mathews v. Eldridge, 424 U.S. 319, 339, 96 S.Ct. 893, 904-05, 47 L.Ed.2d 18 (1976); 20 C.F.R. § 404.950. Whether or not the claimant is represented by counsel or other representative, the AU has an affirmative duty to inquire into all the matters at issue, so as to fully develop the record. 20 C.F.R. § 416.1444; Mimms v: Heckler, 750 F.2d 180 (2d Cir.1984) (duty where claimant is pro se); Decker v. Harris, 647 F.2d 291, 299 (2d Cir.1981) (duty remains where counsel present). The AU’s decision is to be based on the hearing record. 20 C.F.R. § 404.929.

“The fourth level of administrative consideration is review of the AU’s decision by the Appeals Council in the Office of Hearings and Appeals, either at the claimant’s request or sua sponte. The latter form of review is known as “own motion” review. 20 C.F.R. §§ 404.967, 404.969, 416.1467, 416.1468. The Appeals Council may deny or dismiss the request for review, or it may grant the request and either issue a decision or remand the case to an AU. 20 C.F.R. § 416.1467. The Appeals Council may consider evidence beyond that which was before the AU. 20 C.F.R. § 404.976(b). If the Appeals Council decides that the case raises an important issue of law or policy or that oral argument would be helpful, it may grant a claimant leave to present oral argument. 20 C.F.R. 404.976(c). The Appeals Council’s decision, or the AU’s decision if the request for review is denied, is the final administrative decision. 20 C.F.R. § 404.981. The claimant may appeal this decision in federal district court, 42 U.S.C. § 405(g). The district court’s decision is subject to further review in the same manner as other civil actions.”

III. MOTIONS CONCERNING INDIVIDUAL NAMED PLAINTIFFS

A. Defendants’ Motion to Remand (Stieberger)

Prior to plaintiffs’ motions for class certification and preliminary injunctive relief, defendants moved to remand plaintiff Stieberger’s case to the Secretary pursuant to 42 U.S.C. § 405(g). This section provides in pertinent part that the “Court may, on motion of the Secretary made for good cause shown before he files his answer, remand the case to the Secretary for further action by the Secretary____” Defendants note that Stieberger is a member of the class in Dixon v. Heckler, 589 F.Supp. 1494 (S.D.N.Y.1984), in which the Court invalidated a number of the Secretary’s regulatory provisions relating to the assessment of the severity of impairments. Defendants argue that this Court should remand plaintiff Stieberger’s case pursuant to the relief accorded members of the Dixon class.

This motion is denied. First, a remand to the Secretary is not the only form of relief available to members of the Dixon class. The order certifying the class in Dixon expressly provides that persons such as Stieberger may continue individual court actions such as this one. See Dixon v. Heckler, No. 83-7001 (MEL), Order, at 11-12, ¶ 19 (S.D.N.Y. July 25, 1984) (“Nothing *1326 in this order shall be construed as precluding members of the plaintiff class from obtaining greater relief on alternative grounds... Nothing in this order shall be construed as precluding class members who choose to proceed with their individual court cases from seeking preliminary relief in those cases.”) (annexed to Plaintiffs’ Memo in Opposition to Remand). While Stieberger could also have chosen to have her case remanded, see id. at 8, ¶ 10, this is an option which she has chosen not to exercise.

Second, were the only action taken by this Court with respect to Stieberger a remand, she would continue to be subject to the very policies of which she complains in this action—nonacquiescence and Bellmon Review. Such a remand might well be an exercise in futility.

This Court will be in a better position to determine the appropriate relief, if any, to grant plaintiffs at the completion of these proceedings on the merits. In addition to the above-quoted portion of § 405(g), this subsection also provides in pertinent part that “[t]he court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a hearing.” Defendant’s suggestion that this Court remand this case to the Secretary prior to review of the administrative record and over the objection of plaintiff is clearly premature. Indeed, although defendants suggest that a remand is appropriate when the Secretary has applied an erroneous legal standard, see, e.g., Marcus v. Califano, 615 F.2d 23 (2d Cir.1979), plaintiff contends that the evidence of her disability is so persuasive that outright reversal of the Secretary’s unfavorable determination is warranted. See, e.g., Parker v. Harris, 626 F.2d 225 (2d Cir.1980). 10 The proper remedy which may eventually be awarded to plaintiff Stieberger, as well as to other members of the certified class, is best formulated at the completion of these proceedings.

Accordingly, defendants’ motion to remand is denied.

B. Motions to Intervene (Happy, Vega)

Patricia Happy and Angel Vega have moved to intervene in this action. Defendants initially objected to Happy’s motion based on her failure to exhaust administrative review procedures. At that time, Happy’s request for reconsideration was pending before the Appeals Council. On January 23, 1985, her request was denied. According to plaintiffs, defendants no longer oppose Happy’s motion to intervene. See Plaintiffs’ Reply Memo, at 31. Defendants have not indicated a position to the contrary. Happy’s claims are the same in relevant respects to those of other plaintiffs and intervention will not delay or prejudice the adjudication of the rights of the original parties. Accordingly, Happy’s motion to intervene is granted.

Defendants contend that Vega’s receipt of a favorable determination by the Appeals Council on December 10, 1984 renders his challenge moot. In response to this contention, Vega’s attorney submitted an affidavit stating that, as of January 31, 1985, Vega had not yet received any disability benefit payments from HHS, although his other government benefits were terminated as soon as he received a favorable disability determination. Kubitschek Aff. ¶ 5. Subsequently, this Court ordered the Secretary to pay SSI benefits to Vega in accordance with her administrative determination of eligibility. See Order dated February 11, 1985. Accordingly, Vega’s motion to intervene is dismissed as moot without prejudice to Vega's right, if any, to recover any amounts to which he is entitled for the period during which he received neither SSI benefits nor state public assistance.

C. Motions to Consolidate (Sullivan, Johnson)

Plaintiff Milagros Sullivan has moved to consolidate her pending individual action, *1327 84 Civ. 5804 (GLG), with this action. Plaintiff Harold Johnson has also moved to consolidate his pending individual action, 84 Civ. 7613 (LBS), with this action. Defendants do not oppose these motions. See Defendants’ Memo in Support of Motion to Dismiss, at 3. Both plaintiffs challenge the Bellmon Review and non-acquiescence policies of defendants. Both allege that the ALJ who reviewed his or her disability-claim gave insufficient weight to the opinion of his or her treating physician. See Kubitschek Aff. ITU 16-21; Sullivan Aff. UK 8-9; Johnson Aff. 1111 6-7. Plaintiffs’ motions to consolidate are granted.

IV. CLASS CERTIFICATION

Plaintiffs have moved pursuant to F.R. Civ.P. 23(a) and (b)(2) for certification of this action as a class action. Plaintiffs originally proposed that the class consist of

All New York residents whose claims for benefits or continuation of benefits have been or will be denied or terminated pursuant to hearings before administrative law judges since October 1, 1981, and whose benefits have not been granted or restored through subsequent appeals.

See Kubitschek Aff. ¶ 22. 11 In response to questions raised by the Court concerning the scope of the class, plaintiffs also proposed a narrower definition of the class, namely,

All New York residents whose claims for benefits or continuation of benefits have been or will be denied or terminated pursuant to hearings before administrative law judges since October 1, 1981, based on a determination that they do not have a disability that prevents them from engaging in substantial gainful activity; and whose benefits have not been granted or restored through subsequent appeals.

Id. at 11. According to plaintiffs, this narrower class definition would exclude

All persons denied benefits based on a determination that they were engaged in substantial gainful activity, despite their impairment.

All persons denied benefits based on a determination of financial ineligibility (e.g., under SSI), expiration of entitlement period (e.g., under SSDI), or any other ineligibility requirement unrelated to their medical impairment or residual functional capacity to work.

Id. at 12. According to plaintiffs, the latter two groups of cases “are the kinds of cases that are less likely to have resulted in wrongful denials.” Id.

Two overarching determinations must be made by the Court at this stage of the litigation: first, whether this action is properly maintainable as a class action; and second, which claimants are properly includable as members of the class.

Rule 23 governs our analysis of the first issue. Plaintiffs assert, Magistrate Buchwald found, and defendants do not contest, that this action meets the requirements of F.R.Civ.P. 23 and is thus properly maintainable as a class action. Plaintiffs allege that thousands of claimants have been affected by the challenged policies, see McCorry Aff. ¶ 7, Kubitschek Aff. ¶ 23, thus satisfying the numerosity requirement. The commonality requirement is satisfied since the class members all allege that their disability claims were decided by AUs whose allowance decisions were subject to a discriminatory review system and who were instructed by the SSA to disregard circuit court precedents when in conflict with the Secretary’s own policy, in violation of their constitutional and statutory rights. Common questions also predominate since plaintiffs seek only to invalidate the challenged policies and obtain administrative redeterminations of their dis *1328 ability claims rather than an individualized consideration of the underlying merits of their disability claims by this Court. The typicality requirement is met since the named plaintiffs all allege that their disability claims were rejected by ALJs while the Bellmon Review program was in effect and on the basis of SSA rules which conflicted with precedents of the Second Circuit. The adequacy requirement is met since the interests of the named plaintiffs are not antagonistic to those of the class and the relief sought for class representatives (with the possible exception of plaintiff Stieberger; see note 10 supra) and unnamed members is identical. In addition, the qualifications of the plaintiffs’ attorneys are undisputed. The action is properly maintainable as a 23(b)(2) class action since defendants have acted “on grounds generally applicable to the class” through implementation of the Bellmon Review program and the nonacquiescence policy and injunctive relief is requested with respect to the class as a whole. The requirements of F.R.Civ.P. 23(a) and (b)(2) have thus been satisfied, and plaintiffs’ motion for class certification is granted as set forth in the Order issued in conjunction with this Opinion. See Appendix A to this Opinion. This class certification is granted subject to alteration or amendment by the Court at a future stage of these proceedings, if appropriate. F.R.Civ.P. 23(c)(1); see Holden v. Heckler, 584 F.Supp. 463, 489 (N.D.Ohio 1984); Schisler v. Heckler, 107 F.R.D. 609, 614-15 (W.D.N.Y.1984) (annexed to Plaintiffs’ Class Certification Memo), appeal argued, No. 85-6092, 6096 (2d Cir. Aug. 14,1985).

V. JURISDICTIONAL ISSUES

The jurisdictional issues raised by defendants relate primarily to the proper scope of the class. Defendants contend that the class should be limited to those claimants who satisfy the requirements of 42 U.S.C. § 405(g), and that mandamus jurisdiction under 28 U.S.C. § 1361 is unavailable. We consider each of these contentions in turn. 12

A. Social Security Act Jurisdiction: Section 405(g)

Section 405(g) provides in pertinent part that:

Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such determination by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow... The Court shall have the power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing....

The “final decision” requirement consists of two elements—a jurisdictional, non-waivable requirement that a claim for benefits has been presented to the Secretary, and a waivable requirement that the administrative remedies prescribed by the Secretary have been exhausted. See Mathews v. Eldridge, 424 U.S. 319, 328-30, 96 S.Ct. 893, 899-900, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 764-65, 95 S.Ct. 2457, 2466-67, 45 L.Ed.2d 522 (1975); City of New York v. Heckler, 742 F.2d 729, 734 (2d Cir.1984), petition for rehearing denied, 755 F.2d 31, partial stay pending cert. granted, — U.S. —, 105 S.Ct. 3552, 87 L.Ed.2d 671 (1985). 13 Defendants con *1329 tend that the class should not include claimants who have failed to (1) present their claims to the Secretary, (2) exhaust their administrative remedies, or (3) seek judicial review of the Secretary’s decision within the sixty day period delineated in the statute.

1. Presentment

The presentment requirement is satisfied when an application for benefits is made to the Secretary or, in the case of a claimant whose benefits have been terminated, notification is given to the agency that the claimant is still disabled. Mental Health Association of Minnesota v. Heckler, 720 F.2d 965, 969 (8th Cir.1983). According to the definition of the class, class members include those claimants whose applications for benefits or the continuation of benefits have been or will be denied or terminated pursuant to hearings before ALJs and unsuccessful appeals to the Appeals Council. This is clearly sufficient to satisfy the presentment requirement of § 405(g). See Mathews v. Eldridge, supra, 424 U.S. at 329, 96 S.Ct. at 900 (presentment element satisfied when claimant asserts to administrative agency that “benefits should not be terminated because [claimant is] still disabled”); City of New York v. Heckler, supra, 742 F.2d at 735; Jones v. Califano, 576 F.2d 12, 18 (2d Cir.1978) (“It is undisputed that [plaintiffs], by filing claims with the SSA, have satisfied the non-waivable requirement.”); Dixon v. Heckler, 589 F.Supp. 1494, 1500 (S.D. N.Y.1984); cf. Heckler v. Lopez, 463 U.S. 1328, 1335, 104 S.Ct. 10, 14, 77 L.Ed.2d 1431 (1983) (Rehnquist, J., as Circuit Justice) (questioning whether presentment requirement satisfied by “individuals who have never questioned the initial determination that they cease to be disabled”); Wheeler v. Heckler, 719 F.2d 595 (2d Cir. 1983) (terminated recipient who fails to initiate even informal communications with SSA does not satisfy presentment requirement). Future class members, i.e., those who will have their benefits denied or terminated by AUs and not granted or restored by the Appeals Council, will also satisfy the presentment requirement upon the occurrence of these events and thus are properly included within the class. See State of New York v. Heckler, 105 F.R.D. 118, 122-23 (S.D.N.Y.1985); Dixon v. Heckler, supra, 589 F.Supp. at 1512.

2. Exhaustion

The requirement that a claimant exhaust administrative remedies prior to seeking judicial review of an unfavorable disability determination requires the claimant to “press[ ] his claim through all designated levels of administrative review.” Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 2017, 80 L.Ed.2d 622 (1984). The exhaustion requirement is designed to preserve a variety of interests in the proper functioning of the administrative process. As the Supreme Court has described it,

Exhaustion is generally required as a matter of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review.

Weinberger v. Salfi, supra, 422 U.S. at 765, 95 S.Ct. at 2467.

The exhaustion requirement of § 405(g) is waivable either by the Secretary, id. at 766-67, 95 S.Ct. at 2467-68, or by the court in appropriate circumstances. See Mathews v. Eldridge, supra, 424 U.S. at 330-32, 96 S.Ct. at 900-01; City of New York v. Heckler, supra, 742 F.2d at 736. Judicial waiver is appropriate where plaintiffs’ legal claims are collateral to the demand for benefits, where exhaustion would be futile, or where the harm suffered pending exhaustion would be irreparable. See City of New York v. Heckler, supra, 742 F.2d at 736; Mental Health Association of *1330 Minnesota v. Heckler, supra, 720 F.2d at 969-71; see also Heckler v. Ringer, supra, 104 S.Ct. at 2023.

In many Social Security class actions, the precise issue of exhaustion is whether claimants can become members of the class simply by virtue of having presented a claim for benefits to the Secretary without pursuing further administrative channels of review. See, e.g., City of New York v. Heckler, supra, 742 F.2d at 736-37; State of New York v. Heckler, supra, 105 F.R.D. at 122; Dixon v. Heckler, supra, 589 F.Supp. at 1511; Hyatt v. Heckler, 579 F.Supp. 985, 1003-04 (W.D.N.C.1984), vacated and remanded, 757 F.2d 1455 (4th Cir.1985); Aldrich v. Schweiker, 555 F.Supp. 1080, 1090 (D.Vt.1982); see also Heckler v. Ringer, supra, 104 S.Ct. at 2019 (individual claimants had filed Medicare reimbursement claims with fiscal intermediary but had not exhausted further admi