Tom Krause, NOSSCR Litigation Director

In May 2024, Senior District Judge Edward F. Shea, issued a decision in Jeremy H. v. O’Malley, No. 2:23-CV-00298-EFS, 2024 WL 1143496 (E.D. Wash. Mar. 14, 2024). This is an unusual case where the Plaintiff effectively bypassed filing an appeal with the Appeals Council by relying on the Appeal Council’s “own motion” or “focused” review.

On July 24, 2023, eleven days after the ALJ’s decision was issued, Plaintiff’s counsel learned via ARS/ERE that the Appeals Council had assigned Plaintiff’s case to an adjudicator for review. On August 15, 2023, Plaintiff’s counsel learned via ARS/ERE that the Appeals Council was closing its review of the ALJ decision and that the disposition was “other.” On October 17, 2023, sixty-three days after the Appeals Council closure, Plaintiff filed his Complaint. The Court found Plaintiff had exhausted his administrative remedies and timely filed for review. Alternatively, the Court found equitable tolling for late filing of review.

SSA moved to dismiss the Complaint, arguing that, because the Appeals Council’s review of Plaintiff’s case was an informal rather than formal action, it did not constitute an appealable final decision. The Court found the Commissioner’s position was contrary to the Supreme Court decision in Smith v. Berryhill, ––– U.S. ––––, 139 S. Ct. 1765, 204 L.Ed.2d 62 (2019) (the Appeals Council’s dismissal of an SSI claimant’s untimely request for review of an ALJ’s merits decision is a “final decision . . . made after a hearing” and so is subject to judicial review). The crucial question in Jeremy H. was whether the ARS/ERE docket entries downloaded by the claimant’s attorney were sufficient to prove that an action was taken by the Appeals Council which qualified as a final determination. The Court believed that it did.

Alternatively, the Plaintiff argued he timely filed his appeal based on equitable tolling. The Court found the Plaintiff met both prongs of the two-pronged test for equitable tolling. Counsel diligently represented the claimant and frequently reviewed the claim’s online status. According to the Court, a reasonable attorney, diligently pursuing his client’s rights, would not file a request for review when he reasonably believed that a review was already pending. Moreover, the best practices manual provided to representatives cautioned against the filing of duplicative requests. The second prong of the test for tolling was also met. The Court found that the facts of this case were sufficiently similar to Vernon v. Heckler, 811 F.2d 1274 (9th Cir. 1987), to constitute an extraordinary circumstance. The Court concluded that the notice to counsel via ARS/ERE was sufficiently misleading as to hinder Plaintiff from filing his own request for review.

So, what was going on with the Appeals Council—assigning the claim to an adjudicator and, three weeks later, closing the case as “other”? There are at least two possibilities. One is that the Appeals Council considered “own motion” review. The Appeals Council randomly selects closed hearing-level cases that exhibit issues or fact patterns that suggest an increase in the likelihood of error. See Hallex I-3-6-1 (Own Motion Review — General). After a brief review, the Appeals Council either initiates a full review of the ALJ’s decision or allows the decision to stand. A second possibility is that the ALJ was subject to “focused review.” In such cases, all decisions are reviewed. In either situation, the ERE status will change relatively quickly.

Practice Tip: Best practice is to regularly review the ARS/ERE status reports for ALJ-level and Appeals Council-level cases (as well as the recently expanded reports for claims at the initial and reconsideration levels). The best practice is to file a Request for Review timely. If necessary and appropriate, timely file for judicial review. Be aware of possible Appeals Council “own motion” or “focused reviews.” If the need arises, rely on Jeremy H. to argue for timely filing of your appeal. And be creative in your arguments! You never know when it might pay off.