OTIS R. BOWEN, SECRETARY OF HEALTH AND HUMAN SERVICES, PETITIONER
V. JANET J. YUCKERT

   No. 85-1409

   In the Supreme Court of the United States

   October Term, 1986

   On Writ of Certiorari to the United States Court of Appeals for the
Ninth Circuit

   Supplemental Brief for the Petitioner in Reply to the Supplemental
Brief for the Respondent

   On April 7, 1987, respondent submitted a post-argument brief to
bring to the Court's attention an internal government memorandum that
was obtained through discovery in an unrelated case.  The November 20,
1985, memorandum was signed by Lawrence Mason on behalf of the
Associate Commissioner for the Office of Hearings and Appeals (OHA) in
the Social Security Administration (SSA).  It discusses, inter alia,
the Ninth Circuit's decision in the instant case and the possible
legal effect that Social Security Ruling (SSR) 85-28 might have had on
the adjudication of respondent's disability claim if SSR 85-28 had
been issued at that time.

   Respondent contends in her post-argument brief that the Mason
memorandum might have a bearing on the proper disposition of this
case.  This contention is without merit.  As we explain below, the
Mason memorandum was but one of many documents that were generated by
various HHS offices and personnel during internal deliberations
regarding the appropriate departmental response to several court of
appeals decisions that addressed the validity of the severity
regulation.  The particular views in the Mason memorandum upon which
respondent relies are demonstrably incorrect, and indeed are refuted
both by the text of SSR 85-28 itself and by the terms of the draft
document upon which Mr. Mason was commenting.  Mr. Mason's views were
not adopted by the Department at the time, and they have never
represented the official position of the Secretary.  The official
position of the Secretary regarding the meaning and legal effect of
SSR 85-28 (and of the severity regulation it interprets) remains the
position that was set forth in SSR 85-28 itself, in the petition for a
writ of certiorari and the briefs on the merits in this case, and in
the statements made by counsel for the Secretary during the oral
argument before this Court.

   Moreover, the question before the Court in this case is the facial
validity of the severity regulation itself, not the interpretation or
application of SSR 85-28.  The question of the validity of the
severity regulation turns on (i) the text and the Secretary's official
interpretation of the regulation;  (ii) the support for the regulation
in the text and legislative history of the Social Security Act and
amendments thereto;  and (iii) Congress's ratification of the severity
regulation when it enacted Section 4 of the Social Security Disability
Benefits Reform Act of 1984 (Pub. L. No. 98-460, 98 Stat. 1800)
against the background of the language in the current regulation and
the Secretary's public and official interpretation of that language.
/1/ By contrast, the internal Mason memorandum is irrelevant to the
Court's consideration of the validity of the severity regulation.
That memorandum was prepared after Congress ratified the regulation in
1984;  it reflected only one view within HHS regarding the intended
significance of SSR 85-28, not the meaning or validity of the severity
regulation itself;  and Mr. Mason's understanding even of SSR 85-28
was not adopted by the Secretary, much less by Congress.  The Mason
memorandum therefore should have no bearing on the disposition of this
case.

   1. We shall first explain the origins and purpose of the Mason
memorandum, of which the Solicitor General and his staff previously
were unaware.  See note 3, infra.  It and numerous other documents
were generated pursuant to an internal review process that was
instituted by the Secretary to address the general issue of the
Secretary's "acquiescence" in adverse court of appeals decisions.  As
part of that review process, the Secretary established an Acquiescence
Task Force within HHS.  The Task Force was responsible for reviewing
opinions rendered by the courts of appeals in Social Security cases in
order to determine whether there was any variance between circuit
precedent and SSA policies.  If there was such a variance, then SSA
would decide whether to follow or revise its policies within that
circuit.  /2/

   When the Acquiescence Task Force identified a variance between
circuit precedent and SSA policies, it prepared a draft "acquiescence
ruling" explaining a proposed SSA response to the appellate decision.
The draft ruling then was circulated to various offices within HHS for
comment.  Such draft acquiescence rulings were prepared by the Task
Force in November 1985 in response to the Ninth Circuit's decision in
the instant case, which invalidated the severity regulation, as well
as the related decisions in Baeder v. Heckler, 768 F.2d 547 (3d Cir.
1985), and Johnson v. Heckler, 769 F.2d 1020, reh'g denied, 776 F.2d
166 (7th Cir. 1985), petition for cert. pending, No. 85-1442.  The
Mason memorandum provided comments on those draft rulings.  Such
comments also were furnished to the Task Force by the Office of the
General Counsel and other components of HHS.  /3/ However, no
acquiescence rulings were issued regarding the court of appeals
decisions in those three cases.  /4/

   Thus, the Mason memorandum was not prepared as part of the actual
adjudication of respondent's individual claim, but rather was one of a
number of documents prepared by various components and personnel
within HHS in connection with HHS'S internal deliberations regarding
matters of general policy.  Such deliberations not infrequently
generate varying impressions, views and recommendations among the
participants.  Indeed, the very purpose of internal agency
deliberations, such as those coordinated by the Acquiescence Task
Force at issue here, is to ventilate differences, in order to assist
the head of the agency in arriving at a single, definitive and sound
position on behalf of the agency as a whole.  The existence of varying
views by some participants in that process therefore in no way
undermines the force and legal effect of the agency head's final
position.  For this reason, the Court in this case should consider
only the official position of the Secretary, as reflected in published
interpretations and as represented to the Court in this case, not the
prior and differing views of Mr. Mason.  Out of an abundance of
caution, however, we shall now demonstrate that Mr. Mason's
understanding of SSR 85-28 was clearly erroneous and is entitled to no
weight here.

   2. Respondent relies on the Mason memorandum's discussion of SSR
85-28 for the proposition that if her case were adjudicated under that
Ruling, it would not be denied at Step 2 of the sequential evaluation
process.  This discussion, respondent maintains, is contrary to the
position taken by counsel for the Secretary during the oral argument
before this Court on January 13, 1987.

   In the passages from the transcript of oral argument quoted by
respondent (Supp. Br. 3-4, quoting Tr. Oral Arg. 7-9), counsel for the
Secretary represented the Secretary's position to be:  (1) that
"because (SSR 85-28) did not change the substantive standard of
disability, there is no occasion to send (respondent's case) back (to
the Secretary)";  and (ii) that "even in light of (SSR 85-28), which
we think didn't change things, that (respondent's) case would have
come out the same." Those representations were then and remain now the
official position of the Secretary.  Indeed, SSR 85-28 states that it
merely "interprets and clarifies current policy" (Pet. App. 40a
(emphasis added)).  By contrast, the views expressed by Mr. Mason in
the November 20, 1985 memorandum did not then and do not now reflect
the Secretary's position.  Those views, in fact, were erroneous in
several critical respects.  /5/

   a. The Mason memorandum first states (App., infra, 1a):

      We are under the impression that SSR 85-28 is, in effect, an
      acquiescence ruling, accommodating SSA policy to circuit
      decisions on Step 2 of the sequential evaluation process.

   In the very next sentence, the memorandum cites "(t)he Baeder,
Johnson and Yuckert cases" as the circuit decisions to which SSR 85-28
supposedly was intended to conform.  For at least three reasons,
however, it is manifest that SSR 85-28 was not intended to constitute
an "acquiescence" in the Ninth Circuit and the Secretary had
petitioned for rehearing en banc in Johnson when SSR 85-28 was signed
by the Commissioner in September 1985;  (ii) those decisions
invalidated (in whole or in part) the very regulation that SSR 85-28
interprets;  and (iii) the Secretary obviously would not have
petitioned for a writ of certiorari in the instant case if SSR 85-28
were intended to constitute a nationwide "acquiescence" in the
judgment under reveiw.  /6/ Thus, the Mason memorandum rests on a
fundamental misconception of the purpose of SSR 85-28.

   b. The analysis in the Mason memorandum also is flawed.  Respondent
quotes the following two passages from the memorandum (Resp. Supp. Br.
2, quoting App., infra, 1a-2a):

      The Baeder, Johnson, and Yuckert cases were not adjudicated by
      the Agency under the new or clarified policy enunciated in SSR
      85-28.  Had they been, it is quite unlikely that they would have
      have (sic) been decided at Step 2.

            *  *  *  *  *

      All three of the claimants (i.e., the plaintiffs in Baeder,
      Johnson, and Yuckert) had some prior work experience and thus
      the issue of establishing a prima facie case of disability once
      it is proved that the applicant cannot perform prior work was
      present in each case.  Under SSR 85-28, if similar facts are
      present in a case, it may not be denied at Step 2.

   However, the reasons why Mr. Mason believed that the claims in the
instant case and in Johnson and Baeder would not have been denied at
Step 2 are clearly incorrect.

   Mr. Mason's reasoning is elaborated upon in several sentences that
respondent omits (App., infra, 1a):

      As we understand SSR 85-28, if a claimant's impairment produces
      limitations (no matter how minimal or slight), then
      consideration should be given to how they affect the ability to
      perform past relevant work (PRW).  If PRW is, in fact,
      precluded, then Step 2 may not be used.

   SSR 85-28 says nothing of the kind.  To the contrary, as SSR 85-28
itself makes clear, the very purpose of the severity regulation is to
weed out claimants whose impairments are "minimal" or "slight" -- or,
in the operative language of the regulation, whose impairments are not
"severe" because they do not "significantly limit" the ability to do
"basic work activities" (20 C.F.R. 404.1521(a), 416.921(a)) -- without
the need to address the factors that are considered only at subsequent
steps in the sequential evaluation process.

   SSR 85-28 states in this regard (Pet. App. 43a (emphasis added)):

         If (an) assessment shows the individual to have the physical
      and mental ability(ies) to perform (basic work) activities, no
      evaluation of past work (or of age, education, (or) work
      experience) is needed.  Rather, it is reasonable to conclude,
      based on the minimal impact of the impairment(s), that the
      individual is capable of engaging in SGA.

         By definition, basic work activities are the abilities and
      aptitudes necessary to do most jobs.  In the absence of contrary
      evidence, it is reasonable to conclude that an individual whose
      impairments do not preclude the performance of basic work
      activities is, therefore, able to perform his or her past
      relevant work.

   The first of these paragraphs quoted from SSR 85-28 confirms that
under the severity regulation Congress ratified (see Pet. App.
38a-39a), a specific assessment of the claimant's ability to perform
his past work is not necessary if he is found to be able to perform
basic work activities.  The second paragraph just quoted then explains
that the severity regulation, in its practical operation, nevertheless
accommodates the considerations underlying the past work inquiry.
Thus, the term "basic work activities" is defined to mean "the
abilities and aptitudes necessary to do most jobs." 20 C.F.R.
404.1521(b), 416.921(b).  If a person retains the abilities and
aptitudes necessary for "most jobs," he ordinarily will be able to do
his own past job.  See Tr. Oral Arg. 12.  /7/ For this reason, the
vast majority of individuals whose claims are denied because of the
absence of a severe impairment would be found not to be disabled in
any event because they are able to do their past relevant work.  /8/

   SSR 85-28 does introduce one new procedural protection for certain
claimants.  It states (Pet. App. 43a (emphasis added)):

      If the medical evidence establishes only a slight
      abnormality(ies) which has no more than a minimal effect on a
      claimant's ability to do basic work activities, but evidence
      shows that the person cannot perform his or her past relevant
      work because of the unique features of that work, a denial at
      the "not severe" step of the sequential evaluation process in
      inappropriate.

   In those limited circumstances, SSR 85-28 provides that the
decision-maker should consider the claimant's ability to perform other
work in light of his age, education, and work experience (ibid.).
This provision, however, would not apply to respondent, because her
past work was not "unique."

   c. These passages in SSR 85-28, just discussed, that address the
matter of the claimant's ability to perform his past work were
accurately explained by counsel for the Secretary during the oral
argument before this Court.  See Tr. Oral Arg. 12-16.  By contrast,
the Mason memorandum that respondent now proffers was simply incorrect
in its view that respondent's claim would be considered differently
under SSR 85-28.  Apparently, Mr. Mason failed to focus on the
language in SSR 85-28 that provides for the decision-maker to take the
claimant's inability to do his past work into account only if that
work had "unique features." That failure is especially curious,
because the Task Force's draft acquiescence ruling discussing the
Ninth Circuit's decision in the instant case, upon which Mr. Mason was
commenting, likewise stated that inability to perform past work will
be specifically considered only if that work had "unique features"
(App., infra, 5a-6a).  /9/

   3. Because the internal Mason memorandum was incorrect in
suggesting that SSR 85-28 was intended to accomplish a substantive
change in the severity standard and that the adjudication of
respondent's claim would proceed differently if it were considered
under SSR 85-28, there is no occasion for this Court to remand
respondent's case to the Secretary for reconsideration in light of SSR
85-28.  However, should the Court nevertheless decide to dispose of
respondent's case in that manner, we urge the Court to make clear that
such a disposition was meeded appropriate here only because this case
involved an individual claimant who pursued her administrative and
judicial remedies in a timely fashion.  A similar order would not be
appropriate in a class action with respect to class members who failed
to seek review in a timely fashion and who thereby allowed a
preliminary administrative decision denying their claims under the
severity regulation to become final and binding.  See Califano v.
Sanders, 430 U.S. 99, 108 (1977);  20 C.F.R. 404.905, 404.921,
404.955, 416.1405, 416.1421, 416.1455.  The issuance of a Social
Security Ruling interpreting a valid regulation does not authorize a
court to order the reopening of closed claims that were denied under
that valid regulation.  /10/ Otherwise, the Secretary could be
effectively deterred from issuing the sort of clarifying guidance that
often is essential to the sound administration of the Social Security
disability program.  /11/

   4. For the foregoing reasons and those stated in our opening and
reply briefs, it is respectfully submitted that the judgment of the
court of appeals should be vacated and the case remanded to the court
of appeals for review of the Secretary's decision that respondent does
not have a "severe" impairment within the meaning of 20 C.F.R.
404.1520(c) and 404.1521.

   CHARLES FRIED

      Solicitor General

   APRIL 1987

   /1/ See SSR 82-55 and 82-56, which are reproduced in an appendix to
respondent's brief (see Resp. Br. App. 1a-19a) and were discussed in
the legislative history of the 1984 Act (see H.R. Conf. Rep. 98-1039,
98th Cong., 2d Sess. 29 (1984);  S. Rep. 98-466, 98th Cong., 2d Sess.
22 (1984)).  SSR 82-55 was rescinded in April 1985 (see Pet. Br. 48
n.2), and SSR 82-56 was replaced in April 1986 by SSR 86-8.

   /2/ We have been informed that as a result of the Task Force's
review, SSA to date has issued 27 "acquiescence rulings" stating that
it will follow adverse circuit precedent on particular legal issues at
all four levels of the administrative review process, and has issued
no rulings stating that it will decline to follow adverse circuit
precedent.  For a discussion of the procedure that would be followed
in the latter event, see OHA Interim Circular 185 (June 3, 1985),
which has since been replaced by a permanent circular, OHA Circular
III-I (Aug. 22, 1986).  (Interim Circular 185 is reproduced at
Stieberger v. Heckler, 615 F. Supp. 1315, 1403-1405 (S.D.N.Y. 1985),
preliminary injunction vacated, 801 F.2d 29 (2d Cir. 1986)).  See also
52 Fed. Reg. 2557 (1987) (proposed regulations on acquiescence
rulings).  The Acquiescence Task Force's functions have now been
assumed by a unit within SSA.

   /3/ The Mason memorandum was brought to our attention by the Civil
Division of this Department on April 3, 1987, after that Division was
contacted by an attorney for the plaintiffs in the Stieberger
litigation, cited in note 2, supra.  That attorney also is counsel of
record for the Amreican Diabetes Association, et al., which filed a
brief amici curiae in the instant case.

   The plaintiffs in Stieberger challenge the Secretary's legal
authority to decline to follow circuit precedent within the circuit.
After the Second Circuit vacated a preliminary injunction in
Stieberger, the plaintiffs challenged the implementation of the
Secretary's new approach to acquiescence.  In that connection, they
sought through discovery all documents relating to the work of the
Acquiescence Task Foces.  The Secretary contended that all such
documents of a recommendatory nature are protected by, inter alia, the
deliverative process privilege.  The district court, however,
overruled the claim of privilege and ordered that those documents be
furnished to plaintiffs' counsel under a protective order.

   We have been informed by the Civil Division and HHS that thousands
of pages of documents relating to the Task Force's deliberations have
been made available to the Stieberger counsel under this arrangement.
We have been further informed that all of the Task Force's documents
relating to severity regulation cases, which total approximately 140
pages, were included in the first batch of documents that was
furnished to counsel by letter dated January 5, 1987.  The one-page
Mason memorandum was one of those documents.  Nevertheless, counsel
for the Stieberger plaintiffs did not raise any issue concerning the
Mason memorandum until Friday , April 3, 1987, almost three months
after the oral argument in the instant case.  On that date, counsel
for the Stieberger plaintiffs sent a letter to the district court in
that case requesting that the protective order be lifted with respect
to the Mason memorandum so that the Stieberger plaintiffs' counsel
could furnish it to counsel for respondent in the instant case.  In a
conference telephone conversation on the afternoon of Monday April 6,
1987, the Civil Division attorney representing the Secretary in
Stieberger informed the district court that the Secretary would not
object to the lifting of the protective order to that extent.  No
request has been made to lift the protective order with respect to any
other document.

   /4/ In the instant case and Johnson, of course, the Secretary
petitioned this Court to review the adverse appellate decisions.  With
respect to Barder, HHS took the position that the Third Circuit did
not intend that decision to bar all use of the severity regulation.
See Wilson v. Secretary of HHS, 796 F.2d 36, 40-42 (3d Cir. 1986),
petition for cert. pending, No. 86-897.

   /5/ Moreover, in describing SSR 85-28, the Mason memorandum uses
such phrases as "(w)e are under the impression" and "(a)s we
understand SSR 85-28" (App., infra, (a), thereby reflecting
uncertainty regarding the intended import of SSR 85-28, which had then
only recently been issued.

   /6/ Baeder was decided prior to the issuance of SSR 85-28.  SSR
85-28 accordingly discussed Barder, but takes the position that the
Third Circuit there had not actually intended to invalidate the
severity regulation (Pet. App. 40a;  see note 4, supra).

   /7/ Indeed, in denying respondent's claim at Step 2, the ALJ found
that "(respondent's) medical condition does not significantly limit
her ability to perform basic work-related functions, e.g., real estate
salesperson" (Pet. App. 28a (emphasis added)), which was one of her
past jobs (id. at 15a).

   /8/ See Tr. Oral Arg. 15;  House Comm. on Ways and Means, 99th
Cong., 2d Sess., Background Material and Data on Programs Within the
Jurisdiction of the Committee on Ways and Means 114 (Comm. Print 1986)
(table showing correlation between "not severe" and "past work"
denials);  Subcomm. on Social Security of the House Comm. on Ways and
Means, 96th Cong., 1st Sess., Actuarial Condition of Disability
Insurance -- 1978 14-15 (Comm. Print 1979).

   /9/ The draft acquiescence ruling addressing the Ninth Circuit's
decision in the instant case was among the documents furnished to
counsel for the Stieberger plaintiffs under the protective order.  See
note 3, supra.  Although the government in Stieberger asserted the
deliverative process and other privileges with respect to that draft
and other recommendatory documents (including the Mason memorandum),
we have reproduced the draft as an appendix to this brief so that the
Court may appreciate the circumstances that gave rise to the Mason
memorandum.  In doing so, the Secretary of course does not waive the
deliberative process or other privileges with respect to any other
documents.

   /10/ Similar issues regarding the exhaustion of administrative
remedies are presented in Bowen v. Polaski, petition for cert.
pending, No. 86-1617 (filed Apr. 8, 1987).  There are three cases
pending before this Court in which the validity of the severity
regulation was challenged in a class action.  Bowen v. Johnson,
petition for cert. pending, No. 85-1442;  Bowen v. Dixon, petition for
cert. pending, No. 86-2;  and Bowen v. wilson, petition for cert.
pending, No. 86-897.

   /11/ Even where Congress enacted a substantive change in the
severity regulation in 1984 -- requiring consideration of the combined
effect of multiple impairments (42 U.S.C. (Supp. III) 423(d)(2)(C) --
it applied that amendment only prospectively, to determinations made
on or after December 1, 1984.  See Social Security Disability Benefits
Reform Act of 1984, Pub. L. No. 98-460, Section 4(c), 98 Stat. 1801.

   APPENDIX