Monday, October 28, 2013

socialNsecurity Appendix K


Henry Reuss Federal Plaza, Suite 300
310 W. Wisconsin Avenue
Milwaukee, WI  53203
(414-297-3141 X 3009)

December 10, 2004

The Honorable Martin Gerry
Deputy Commissioner
6401 Security Boulevard
100 Altmeyer Building
Baltimore, MD  21235

Dear Deputy Commissioner Gerry: 
I am writing to express our deep concern with the administrative law judge quota memorandum we received from Associate Commissioner Thurmond on November 19, 2004.  When we met with the Commissioner in October, we expressed our concern with the relentless pressure from  Associate Commissioner Thurmond for increased administrative law judge case production.  We expressed our concern with its long term corrosive impact on both the due process hearing and the Social Security disability trust fund.  In his last memorandum, Associate Commissioner Thurmond stated that "our disposition per ALJ rate needs to average at least 2.45 dispositions per ALJ - at least 52 dispositions per month (624 dispositions per year)".  Mr. Thurmond's quota is actually closer to 62 dispositions per month since his annual disposition of 624 is based on working the entire month of each and every month of a 12-month year.  With holidays, annual leave and sick leave no judge or agency employee actually works the entire month of each and every month in a year.  
We are extremely disappointed with the administrative law judge production quotas issued by Associate Commissioner Thurmond because they are in violation of law,  a settlement agreement with the agency and our collective bargaining agreement.  This egregious action must be corrected forthwith.  
Production quotas for administrative law judges are contrary to the law.  In 1946 the Congress adopted the Administrative Procedure Act creating the hearing examiner system [now administrative law judges] to protect the public from undue agency influence in administrative hearings.  The United States Supreme Court first addressed the question of the status of Federal administrative law judges in 1951.  The Court stated that the legislative history of the Administrative Procedure Act indicated that enhancement of the status and function of the trial examiner was one of the important purposes of that administrative  reform.  [Universal Camera Corp.  v. National Labor Relations Board, 340 U.S. 474 (1951)]  The Administrative Procedure Act was enacted to address frequent complaints  that agency hearing examiners were "mere tools of the agency concerned and subservient to the agency heads in making their proposed findings of fact and recommendations".   Congress reformed the system by making  hearing examiners "a special class of semi-independent subordinate hearing officers" by vesting control of their compensation, promotion and tenure in the Civil Service Commission to a much greater extent than in the case of other Federal employees.  [Ramspeck v. Federal Trial Examiners Conference, 345 U.S. 128 (1953)]  The Supreme Court again reviewed  the process of administrative adjudications in 1978.  The Court said that prior to the Administrative Procedure Act, there was considerable concern that persons hearing cases at the administrative trial level could not exercise independent judgment.  The Court stated that the agency administrative adjudication system "is currently structured so as to assure that the hearing examiner exercises his independent judgment on the evidence before him free from pressure by the parties or other officials within the agency."  The Court stated that there can be little doubt that the role of the modern Federal hearing examiner or administrative law judge is "functionally comparable" to that of a trial judge.   [Butz v. Economou, 438 U.S. 478 (1978)]  The Court affirmed this role of the Federal  administrative law judge in 2002.  [Federal Maritime Comm'n v. South Carolina State Ports Authority, 535 U.S. 743 (2002)
 Litigation by judges against the Social Security Administration over production quotas has a long history.  A declaratory action brought by ALJ Simon Nash, the HOCALJ in Buffalo, to determine whether an agency policy directive issued to judges to produce 26 dispositions per month was an illegal quota in violation of the Administrative Procedure Act lasted over ten years and resulted in two federal circuit court decisions. [Nash v. Califano, 613 F.2d 10 (2d Cir. 1980) ("Nash I") and Nash v. Bowen, 869 F.2d 675 (2d Cir. 1989) (Nash II)]   Nash II stands for the proposition that administrative hearings shall be conducted in an impartial manner and that fixed case production quotas are a violation of the Administrative Procedure Act.  After a fact-finding hearing the district court found the directive not to be a quota. The Court of Appeals stated:

[W]e agree with the district court that reasonable efforts to increase the production levels of ALJs are not an infringement of decisional independence. In [the] memorandum . . . then Director Trachtenberg indicated that while he was opposed to the fixing of quotas, he was recommending a goal of 26 dispositions per four-week period.  Id. at 680 (emphasis in original).

Associate Commissioner Thurmond dispensed with all pretenses that his directive was recommending a goal of 52 dispositions by stating "our disposition per ALJ rate needs to average - at least 52 dispositions per month (624 dispositions per year)."  In Nash II the court was sympathetic to the agency argument that something had to be done since "the Social Security Administration (the "agency") was faced with an administrative crisis due to a backlog of over 100,000 cases."  Id. at 676 and 681. Today the backlog is over 500,000 cases.  We assert this five-fold increase in the backlog is not the fault of the judges and setting quotas that require judges to more than double their production will not solve the problem.  The cause of this "administrative crisis" brought on by the five-fold increase in the backlog has multiple roots which include a sustained economic "down-turn", an aging population and the agency reorganization known as "HPI". 
 The judicial independence for Federal administrative law judges, which is provided for in the Administrative Procedure Act, was codified by excluding them from the Federal employee agency appraisal systems.  [5 U.S.C. sec. 4301]  It is well established that Congress created judicial independence for administrative law judges for the protection of the claimants and not for the protection of the judge.   It should also be noted that  SSA administrative law judges have the sole authority to set the time and place for the hearing of a case.  [20 CFR 404.936]    With regard to travel dockets, a former SSA chief judge issued a memorandum setting forth suggested numbers of cases to be scheduled on hearing trips.  In litigation involving the interpretation of this memorandum, an administrative law judge for the Merit Systems Protection Board held that this memorandum sets forth "guidelines" and "goals" for scheduling cases and other factors, such as the probable duration of the hearings, determined the size of the docket.  In fact, SSA Chief Judge Charles Boyer testified that the numbers set forth in the memorandum were not quotas and there could be variances.  [SSA, v. Stephens, MSPB Case No. CB-7521-97-0048-T-1 (1998)]   It is clear that the law prohibits the agency from imposing case production quotas on administrative law judges to protect the judges from undue agency influence and from the conditions existing prior to the Administrative Procedure Act. 
 Production quotas for administrative law judges are contrary to a settlement agreement that the agency entered into with administrative law judges who were involved in litigation with the agency.  During the 1970's these administrative law judges commenced an action against the agency for interfering with their judicial independence.  In 1979 the litigation ended when the agency entered into a settlement contract with the judges. The settlement contract provided, in part,  that "OHA will not issue directives or memoranda setting any specific number of dispositions by ALJs as quotas or goals."  The agreement further provided that it could not be changed without good faith consultation with both the Association of Administration Law Judges and the ALJ Corps.  [Bono v. United States of America Social Security Administration,  Civil No. 77-0819-CV-W-4 (W.D. Mo. 1979)]  Within a month after the Bono settlement, the General Counsel of the Social Security Administration issued a memorandum to all agency administrative law judges, with reference to the settlement,  that stated, "it is understood that OHA will not issue directives or memoranda which set any specific number of dispositions by ALJs as quotas or goals.  These prohibitions apply to both the headquarters staff and to management officials in the regional and hearing offices as well."  [SSA General Counsel, Mr. Donald A. Gonya, Memorandum, dated July 28, 1979]  No subsequent General Counsel has rescinded this memorandum.

Production quotas for administrative law judges are contrary to the AALJ collective bargaining agreement with the agency.  The contract clearly provides that the work function of an administrative law judge is professional, varied and complex and does not lend itself to standardized production in given periods of time.  The collective bargaining agreement contains the following language:

The Parties recognize that the Judges covered by the terms of this agreement are administrative law judges appointed pursuant to 5 U.S.C. sec. 3105, and are engaged in the performance of duties which require the consistent exercise of discretion, knowledge, and judgment in conducting hearings.  These duties are complex and varied as set forth in 5 U.S.C. sec. 7103 (15)(A)(iv) and are of such a character that the output produced or the results accomplished by such work cannot be standardized in relation to a given period of time.  [Article 5, Section 1]
 Administrative law judges, like other professional persons, are subject to performance standards that are prescribed by the code of professional conduct that governs their particular profession.  The American Bar Association Model Code of Judicial Conduct for Federal Administrative Law Judges sets forth performance standards in some detail for administrative law judges.  For example, administrative law judges should be faithful to the law and maintain professional competence in it.  Administrative law judges should be patient, dignified and courteous to litigants, witnesses and lawyers and should accord to all persons who are legally interested in the proceeding, or their lawyers, full right to be heard according to law.  The judge should promptly dispose of the business before the court and devote adequate time to his or her duties, be punctual in attending hearings and expeditious in determining matters under submission, and insist that other subordinate officials, litigants and their lawyers cooperate with the judge to that end.  [Canon 3]  We have long advocated that the agency work with the Office of Personnel Management and/or the Office of Government Ethics to have this code of professional conduct adopted as part of the governing regulations for all administrative law judges.  It should also be noted that the Merit Systems Protections Board has stated that it looks to the America Bar Association codes of professional conduct for guidance in disciplinary cases.   
It is very troubling to us to have the Associate Commissioner of OHA issue a memorandum that is clearly in violation of the law, a settlement agreement with the agency, and the AALJ collective bargaining agreement.  It is the core mission of OHA to administer justice to the American public by providing full and fair due process hearings.  This is a right that the American people are entitled to under our Constitution.  The quota memorandum is clearly improper and it infringes on this basic right of the American people.  It will also have an adverse effect on the Social Security disability trust fund by having the result of "paying down the backlog". 
As part of the Redesign Reform Plan for the Social Security disability system, the SSA Office of Workforce Analysis built a computer model to study the time needed to perform the work functions on a disability claim at each step of the process from the initial level to the Appeals Council.  Based on this study, it was determined that the time line for performing the administrative law judge function provided for a range of  25 to 55 cases per month.  [Plan For a New Disability Claim Process, Social Security Administration, September 1994]   Based on this study, administrative law judge case production at any point within this range would be reasonable.  According to recent information that we have seen, each disability case is worth about $150,000 to $200,000 dollars, plus an undetermined amount of medical costs.  If a judge would produce dispositions according to the Thurmond quota schedule, the judge would be devoting less than three hours time to each case.  If one hour is devoted to the hearing, less than two hours would remain for all of the pre-hearing and post-hearing work on the case.  We suggest that it is not reasonable to expect a judge to "churn" out cases in this manner.   The Thurmond quota scheme is  no more than a plan to "pay down the backlog" that will have a devastating effect on both the Social Security disability trust fund and administrative due process.  Moreover, such a plan to "pay down the backlog" may attract unfavorable attention from both  the political arena and the press.  We have had this experience in the past and we do not want to have it occur again.
 The action by the Associate Commissioner of OHA is a serious encroachment on the Administrative Procedure Act and the Constitutionally protected right of a due process hearing.  This egregious act is injurious to the American people and it must be corrected immediately.  We respectfully request an early meeting with you to discuss this very serious affront to our long established system of justice and due process. 
There are other serious and significant issues which negatively impact the administrative judiciary at SSA and should be discussed and resolved at this meeting.  One of these issues involves the absence of any settlements in any of our pending grievances, arbitrations or litigation, or worse, even a scheduled meeting to discuss settlement.  As a result, the clear direction of the Commissioner in Orlando to resolve as many issues as possible will not be honored.  Another serious issue which threatens the efficient and effective functioning of the administrative judiciary at SSA, is the absence of full authority in the chief administrative law judge.  Associate Commissioner Thurmond is not a judge and cannot perform the duties of the chief judge.  Finally, other issues that must be addressed at the meeting include: the absence of a positive labor relations environment at OHA;  the agency's apparent refusal to bargain over certain critical aspects of the electronic folder initiative; elimination of no-cost travel orders; ALJ annual leave parity with the SES; administration of the transfer and Flexiplace articles in the contract; staffing; no apparent attempt by management to address the horribly written draft decisions we face daily and other issues which have been accumulating. 
 All of the above issues are important to the AALJ and we want very much to maintain the positive working relationship we have with the Commissioner, as well as with you and your staff.  Because of this outstanding relationship, we respectively request that you share a copy of this letter with Commissioner Barnhart.

                                                                                    Ronald G. Bernoski

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