375 F. Supp. 3d 559
E.D. Pa.2019Background
- Michael Culclasure applied for Social Security disability benefits; ALJ Monica Flynn denied benefits after a video hearing on July 5, 2017; the Appeals Council denied review and the ALJ decision became final.
- Culclasure filed for district-court review and, after the Supreme Court's June 21, 2018 decision in Lucia, first raised an Appointments Clause challenge to the ALJ's appointment in an August 6, 2018 brief.
- The Commissioner conceded ALJs were not properly appointed under Article II post-LucIa but argued Culclasure forfeited the challenge by not raising it at the administrative level prior to July 2018.
- Magistrate Judge Hart recommended denying relief as forfeited; Culclasure objected and the district court reviewed whether Social Security claimants must raise Appointments Clause challenges at the ALJ level and whether any exhaustion requirement should be excused.
- The court declined to impose a judicially created issue-exhaustion rule in the Social Security video-hearing context, found Culclasure’s challenge timely given the post‑Lucia developments, and—alternatively—excused any forfeiture as futile because the ALJ lacked authority to resolve the constitutional claim.
- The court remanded for a new hearing before a properly appointed ALJ.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Culclasure forfeited an Appointments Clause challenge by not raising it at the ALJ or Appeals Council | Culclasure: no administrative exhaustion/issue‑exhaustion requirement; raised challenge at first opportunity after Lucia | Commissioner: challenge was not "timely" because it was not raised in administrative proceedings | Court: did not find forfeiture — declines to create ALJ‑level issue‑exhaustion rule in Social Security context; challenge treated as timely |
| If forfeiture existed, whether futility excuses failure to raise the challenge before the ALJ | Culclasure: futile to raise before ALJ who lacked authority to decide Appointments Clause and before Lucia/agency guidance | Commissioner: forfeiture should stand; agencies require timely challenges to preserve issues | Court: futility would excuse forfeiture — ALJ could not grant the Lucia remedy and the Administration’s post‑Lucia guidance showed ALJs were not to resolve the issue; remand required |
Key Cases Cited
- Lucia v. Securities & Exchange Comm'n, 138 S. Ct. 2044 (2018) (ALJs are Officers under the Appointments Clause; remedy is a new hearing before a properly appointed official)
- Ryder v. United States, 515 U.S. 177 (1995) (discusses "timely" Appointments Clause challenges on direct review)
- Sims v. Apfel, 530 U.S. 103 (2000) (rejects judicially created issue‑exhaustion requirement at the Appeals Council in Social Security cases; characterizes SSA proceedings as non‑adversarial)
- Freytag v. Commissioner of Internal Revenue, 501 U.S. 868 (1991) (court may consider nonjurisdictional Appointments Clause challenges not raised below when equitable to do so)
- L.A. Tucker Truck Lines, Inc. v. United States, 344 U.S. 33 (1952) (courts generally require timely objection in agency proceedings; cited but distinguished)
- Elgin v. Department of the Treasury, 567 U.S. 1 (2012) (statutory review schemes can preclude standalone constitutional suits; distinguished on facts)
- Biestek v. Berryhill, 139 S. Ct. 1148 (2019) (describes informal, non‑adversarial nature of SSA hearings)