Carr v. Saul

SHOULD A BROAD ISSUE EXHAUSTION RULE APPLY?

Petitioner Carr argues that there is no support for a “general rule” of judicially mandated issue exhaustion, and that courts have often acted in an ad hoc fashion with respect to the doctrine. Brief for Petitioners, Willie E. Carr et al. at 33–34. Even if such a rule existed, Carr maintains that his claim would qualify for an exception, as the SSA has no technical expertise on Appointments Clause matters. Id. at 35. Carr contrasts his claim with Lucia v. S.E.C, an Securities and Exchange Commission (“SEC”) Appointments Clause claim, as the Court’s ruling in that case relied on an express statutory issue exhaustion requirement, which is not present here. Id. at 35. Carr asserts that agencies regularly present new legal issues to reviewing courts, and that it would be inequitable to prohibit claimants from doing the same. Id. at 36.

Should issue exhaustion apply, rendering his claims forfeited, Carr argues that the Court should excuse the forfeiture. Id. at 39. Carr asserts that the Court has previously excused forfeiture of non-jurisdictional constitutional matters that are “structural.” Id. Carr maintains that because the agency has clearly acknowledged the unconstitutional appointments, it is appropriate for the Court to entertain his claim, as the matter is structural. Id. at 40. This exemption, Carr explains, is central to the conception of separation of powers, because it provides a judicial check on executive agency action. Id.

On the other hand, Respondent Andrew M. Saul contends that forfeiture rules should still apply in this case. Brief for Respondent, Andrew M. Saul, Commissioner of Social Security at 25. According to Saul, contrary to Carr’s argument, the forfeiture rule is not new, and the Supreme Court should apply it here. Id. Saul further argues that previous Supreme Court cases in this area are not improvisational, as Carr claims, and that the Supreme Court has always relied on a general rule of forfeiture. Id.

Saul further argues that the Supreme Court’s precedent of forfeiture law still applies today. Id. at 27. Forfeiture rules, Saul contends, function as the Court’s mechanism for determining which arguments the Court will hear. Id. According to Saul, these rules are squarely within the Court’s authority, and the Court could alter forfeiture rules to allow claims like Carr’s if it so chooses. Id. Further, Saul argues that the Supreme Court is well equipped to hear cases that require applying “background rules to constitutional claims” and that, since the Supreme Court itself modified the common law in this area, the Supreme Court can determine which actions the court system can take. Id. at 27–28. Despite Carr’s reliance on Sims v. Apfel, Saul claims, the Supreme Court in that case did not create a broad rule that would mandate an exception to forfeiture rules for SSA cases. Id. at 32. Saul posits that the Supreme Court precedent on which Carr relies is consistent with the Supreme Court’s previous application of forfeiture rules, despite Carr’s claim of inconsistency in the Court’s application of forfeiture rules to administrative proceedings. Id. at 26.

WAS THE APPOINTMENTS CLAUSE CLAIM FORFEITED?

Carr argues that because there is no statutory or regulatory issue exhaustion requirement in SSA proceedings, he has not forfeited his Appointments Clause claim and is entitled to judicial review. Brief for Petitioners at 18–19. Carr asserts that because SSA proceedings are not adversarial in nature, a judicially-imposed doctrine of issue exhaustion would be inappropriate under the framework set forth in Sims v. Apfel. Id. at 23–24. In Sims, Carr notes, the Court held that because SSA proceedings were non-adversarial, claimants did not need to exhaust all issues in the intra-agency appeal process for those issues to be preserved for later judicial review. Id. Carr emphasizes that judicial proceedings and SSA proceedings are materially unakin, and that SSA proceedings lack many of the procedural guardrails of a trial. Id. at 26. Additionally, because the intra-agency review process allows claimants to raise new issues on appeal, Carr maintains the rationale for requiring issue preclusion in the same mode as the judicial appellate process does not exist. Id. at 27.

Further, Carr avers that the SSA had not put benefits claimants on notice as to any potential issue exhaustion requirement at the time of his original claim. Id. at 29. Carr argues that because the SSA itself expects that the ALJ or Appeals Board will raise new issues on their own initiative, the SSA demonstrably requires remedy exhaustion but not issue exhaustion. Id. Carr asserts that the SSA could have provided meaningful notice to claimants regarding Appointments Clause challenges at the time but chose not to, instead preferring to leave claimants in the dark while instructing ALJs not to entertain Appointments Clause challenges. Id. at 31.

To support his contention that courts often hear constitutional claims, such as his Appointments Clause claim, even when administrative routes have not been exhausted, Carr cites a string of common law cases. Id. at 38. Specifically, Carr disputes the notion that requiring issue exhaustion on his claim would promote judicial fairness or efficiency. Id. at 39. As the SSA had already renounced its ability to hear Appointments Clause challenges, Carr asserts that it would be a waste of resources to compel him and similarly situated claimants to bring a claim before agency review. Id. at 39. In that vein, Carr also argues that requiring issue exhaustion would necessitate re-tooling the entire SSA claim review process, a much more intensive and costly endeavor than simply permitting judicial review. Id. at 41.

Saul argues that because Carr did not raise the Appointments Clause during the initial SSA proceedings, he cannot do so now. Brief for Respondent at 11. Saul brings support from previous Supreme Court cases that held that a party must generally bring all claims during administrative proceedings before doing so in court. Id. Saul also argues that even though the Supreme Court has ruled that a party is entitled to a new hearing if the previous one violated the Appointments Clause, the Supreme Court also held that the aggrieved party must have challenged the violation in a “timely” manner, and that Carr did not do so here. Id.

Saul notes that in this instance, neither Congress nor the SSA have passed explicit statutes or regulations about whether courts can consider issues that a party did not raise in an SSA proceeding. Id. at 11–12. Based on this, Saul argues that the Supreme Court should apply the general rule that a claimant must raise an Appointments Clause issue during initial SSA proceedings or forfeit the claim. Id. at 12. Saul supports this argument by pointing to cases dating from the early 1900s, and extending to recent years, in which the Supreme Court refused to hear claims that had not been raised in administrative proceedings. Id. at 12–13. Saul further argues that this rule promotes fairness and efficiency, and that it is the job of administrative agencies to make initial decisions, while courts are only supposed to review them. Id. at 14.

Beyond the issue of claim forfeiture, Saul argues that Carr is not entitled to a new hearing with new ALJs under the Appointments Clause. Id. at 15. Saul posits that even though the ALJs may have been wrongfully appointed, common law does not require that any of their past actions be invalidated. Id. Saul points to a common law rule establishing that any actions that an appointed person takes in the position to which they were appointed are valid as long as the actions are within the responsibilities of that position. Id. Saul further argues that even though the Supreme Court limited that rule in later cases, the Supreme Court still required the aggrieved party to challenge the appointments in a timely manner. Id. at 16–17. Saul claims that Carr had numerous opportunities to object to the ALJs’ appointments, and that his failure to do so means that he is not entitled to a new hearing. Id. at 19–20.