VI cases on the public; the importance of the precedent-setting action; the delicacy of the situations; and the large amount of money involved. The standards provide two factors for determining the difficulty and responsibility of attorney positions. We have applied these factors for the hearing examiner positions: (1) Types of cases or problems and (2) level of responsibility.

Type II cases are characterized by:

Difficult legal or factual questions because of absence of clearly applicable precedents.

Cases are strongly contested by highly competent legal counsel.

Cases have an impact which affects a significant segment of private or public interest, either economically, socially, or politically, and involve large sums of money, about $100,000.

Type III cases are characterized by:

Legal questions or factual issues extremely complex.

Large sums of money involved (approximately one million).

Cases are vigorously contested.

Have important impact on major private or public interest. (Major extension or revision in a status and/or other grant programs, or a nationwide retirement system; a substantial question of civil rights involving the due process clause, or defining legal rights.)

Problems of unusual delicacy.

It is our opinion that the Title VI cases now assigned to the hearing examiners have characteristics more nearly like those defined for Type III. Large sums of money are involved (one case cited in HEW involved $70 million withheld from Alabama). Cases are vigorously contested. The cases have a significant impact on both private and public interests.

We have rated the overall responsibility of the positions as level E, which is the highest of five levels of responsibility defined in the standard. We determined level E on the fact that the hearing examiner decides difficult questions and renders final decisions for action by the Commissioners.

Type III cases with Level E responsibility, according to the GS-905 standards, convert to GS-15.

In the Commission's 1964 review of the Social Security hearing examiners, comparison was made with Coast Guard hearing examiner positions, which had been placed in grade GS-15 by application of the standards for General Attorney GS-905. The Commission recognized the decisions of the Coast Guard hearing examiners as final decisions, although there was the right of appeal to the Commandant of the Coast Guard. At that time, Coast Guard positions were considered clearly one grade better than the HEW positions. About 85% to 90% HEW cases were disability claims, which were consdiered "neither complicated nor contra verted." The Coast Guard hearings concern licenses of specific individuals under Maritime Law and acts of incompetency or misconduct. With the advent of Title VI cases and the large amounts of money involved (as cited above where one case involved $70 million,) we believe the complexity of the work of the HEW hearing examiner has increased to the extent that the positions now merit grade GS-15. We may note here that one Coast Guard hearing examiner position has now been classified in grade GS-16.

A number of agencies requiring hearings in non-discrimination--Federally assisted programs have hearing examiner positions in grade GS-16, such as Labor and Agriculture, but their grades were not based on hearings under the Civil Rights Act. Agencies that are specifically concerned with the effectuation of Title VI of the Civil Rights Act of 1964, are: Interior, Agriculture, Labor, General Services Administration, Housing and Urban Development, National Science Foundation, and Health, Education, and Welfare. GSA, HUD, and NSF have not established hearing examiner positions. They are assigned examiners when hearings become necessary.

It is our opinion that because of the complexities of cases arising under Title VI of the Civil Rights Act and under Title XVIII of the Social Security Act, the responsibilities of the Hearing Examiner (Licensing and Benefits) Social Security Administration, have increased significantly and the positions may now be more appropriately classified in grade GS-935-15.

Likewise, we believe that the position of Hearing Examiner (Civil Rights), Office of Education, because of the operations in a relatively unprecedented area of civil rights, merits GS-15.

Attachment.

MAY 9, 1973.

Mr. WILMOT R. HASTINGS,

General Counsel, Department of Health, Education, and Welfare,
Washington, D.C.

DEAR Mr. HASTINGS: This refers to your letter of April 9, 1973, which requests that we help resolve the current question of whether Administrative Law Judges appointed under section 3105 of title 5, United States Code, are required to preside over hearings to be held under title XVI of the Social Security Act beginning January 1, 1974. After carefully considering the arguments which have been presented with regard to this question it is my opinion that section 3105 ALJs are not required to preside over these hearings. Rather, it is the power of the Secretary of HEW to appoint individuals to fill these positions as he would other positions at HEW. As a result, I do not feel that the Civil Service Commission should provide section 3105 ALJS to conduct these hearings. While I reach a conclusion different from yours in this matter, I recognize the weight of the arguments you have presented in favor of APA application. Therefore, I would gladly join with you in pressing for an opinion of the Attorney General to resolve this basic conflict, particularly since the consequences of proceeding incorrectly, i.e., upset in the courts, is a matter in which the Department of Justice will bear litigation responsibility.

For purposes of determining the applicability of the APA the language Congress has given us in title XVI is terribly ambiguous. On the face of the statute alone I could not conclude that Congress intended the APA to apply. I would, in fact, reach the opposite result. Given the recent specificity in other legislation with which Congress has made the APA applicable,1 given the absence of an explicit requirement that title XVI proceedings are to be determined “on the record", and given the clearly intended similarity between the statutory procedural provisions for SSI hearings and those for OASDI hearings under title II, (42 U.S.C. § 405), I could not conclude from the title XVI language alone that these hearings should be considered "cases of adjudication required by statute to be determined on the record after opportunity for an agency hearing" within the meaning of subsection 594 (a) of the APA.

66

Title XVI provides only for "reasonable notice and opportunity for a hearing." There is no explicit requirement that the determination be made "on the record" as required by subsection 554 (a). Often the requirement of "the record" can be read into a statute by looking to the statutory provisions for judicial review. while the Securities and Exchange Act does not expressly require orders of denial of registration to be made ‘on the record', such a requirement is clearly implied on the provision for judicial review of these orders in the circuit courts of appeals. Upon such review, the Commission files 'a transcript of the record upon which the order complained of was entered', and "The finding of the Commission as to the facts, if supported by substantial evidence shall be conclusive.'" (Attorney General's Manual on the Administrative Procedure Act 42 (1947)). It should be noted that the judicial review provision for OASDI hearings under title II (42 U.S.C. § 405 (g)) contains language virtually identical to that cited by the Attorney General, supra, i.e., language which may be read to imply the record requirement. Section 405 (g) provides that "the findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive."

It is interesting that in enacting title XVI Congress, although incorporating section 405 (g) by reference, provided an exception to the key language quoted above. Subsection 1631 (c) (3) provides:

"The final determination of the Secretary after a hearing under paragraph (1) shall be subject to judicial review as provided in section 205 (g) [ 42 U.S.C. § 405 (g)] to the same extent as the Secretary's final determination under section 205 [42 U.S.C. § 405] except that the determination of the Secretary after such hearing as to any fact shall be final and conclusive and not subject to review by any court." (Emphasis added.)

The language of subsection 1631 (c) (3) certainly does not square with the former section 10(e), the judicial review provision of the APA, (5 U.S.C.

1 See, e.g., section 14 of Public Law 92-576 (Longshoremen's and Harbor Workers' Act Amendments of 1972) which provides "Notwithstanding any other provisions of this Act. any hearing held under this Act shall be conducted in accordance with the provisions of section 554 of title 5 of the United States Code. Any hearing shall be conducted by a hearing examiner qualified under section 3105 of that title.

2 See H.R. No. 92-231. 92d Cong.. 1st Sess. 341 (1971) which states: "Section 2031 (d) (1) [new subsection 1631(d) (1)] provides that subsections (a), (d), (e). and (f) of section 205 of the Act, will apply with respect to benefits under title XX [now title XVI] to the same extent as they apply to OASDI benefits.

§ 706), which requires the reviewing court to look at the "whole record." Rather, it precludes the court from reviewing the evidence in the record since the Secretary's findings of fact are not reviewable. The language also negates the APA requirement that the reviewing court hold unlawful findings and conclusions found to be "unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute." (5 U.S.C. § 706(2) (E)). And it is clear that Congress intended the "whole record" requirement to permit courts to review findings of fact. In essence, rather than incorporating the record requirement in title XVI, Congress has negated it.

Given the ambiguity of the statutory language a clear statement of legislative intent would be helpful. However, the only pertinent legislative history appears to be that which you have cited, (H.R. Rep. No. 92-231. 92d Cong., 1st Sess. 156 (1971)), and that language is not clear as to whether the APA specifically applies or is only to serve as a model for proceedings under title XVI. The pertinent part of the House Report states that "full hearings would be otherwise conducted in accordance with the requirements of such act which include, for example, the right to submit evidence, to cross examine witnesses, to be heard by an impartial examiner and to a decision based on the hearing record." (Emphasis supplied) This, of course, falls somewhat short of a Congressional statement in the text of legislation that "the provisions of sections 554, 556, and 557 of title 5 of the United States Code will apply to hearings under title XVI."

There is some further reference to the applicability of the APA in the House floor debates, (See, 12 Cong., Rec. H. 5658 (daily ed. June 22, 1971), but one must be wary of basing Congressional intent on the statement of individual members of only one of the two houses of the legislature, particularly where even the more broadly based Committee reports are ambiguous on the same issue.

Even assuming that the APA is applicable to those proceedings, however, does not dictate a requirement that those employees who preside over the hearings must be ALJ's appointed under section 3105 of title 5 for section 1631 (d) (2) expressly modifies the application of the APA with regard to hearing examiners in these proceedings. The pertinent section provides :

"(2) To the extent the Secretary finds that it will promote the achievement of the objectives of this title, qualified persons may be appointed to serve as hearing examiners in hearings under subsection (c) without meeting the specific standards prescribed for hearing examiners by or under subchapter II of chapter 5, United States Code."

First, I don't think there can be any doubt that this language expressly supersedes the APA within the meaning of section 559 of the APA. The reference to "subchapter II of chapter 5" is a direct reference to the codified position of the APA and the language "without meeting the specific standards" clearly indicates that an exception to the APA is intended. With respect to exemption from APA, language much less explicit than the present has been held to modify the APA. As the Supreme Court has stated:

"Unless we are to require the Congress to employ magical passwords in order to effectuate an exemption from the Administrative Procedure Act, we must hold that the present statute expressly supersedes the hearing provision of that Act." (Marcello v. Bonds, 439 U.S. 305, 310 (1955).

Therefore, in the final analysis, the question of whether ALJ's must preside over title XVI proceedings depends on the extent and effect of this modification. In my opinion, subsection 1631(d) (2), at a minimum, supersedes the APA with regard to the appointment of hearing examiners, i.e., subsection 1631(d) (2) supersedes the provision in the APA which provides that:

"There shall preside at the taking of evidence

(1) the agency;

(2) one or more members of the body which comprises the agency; or (3) one or more hearing examiners appointed under section 3105 of this title."

(5 U.S.C. § 556 (b)). As a result, section 3105 ALJs are not required, and need not be supplied by the Commission. The appointment of officers to preside over these proceedings is left to the discretion of the Secretary and he may appoint

3 "The requirement of review upon the 'whole record' means that courts may not look only to the case presented by one party, since other evidence may weaken or even destroy that case." (Sen. Doc. No. 243, 79th Cong., 2d Sess. 214, 280 (1946); See also Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951)).

individuals as he sees fit. I believe this view is supported by the previously cited legislative history which states that "the Secretary would establish the requirements to be used in selecting hearing examiners the examiners would not

be selected under the conditions set forth in the Administrative Procedure Act. . ." (H.R. Rep. 92-231, supra at 156).

You argue that absent a "finding" by the Secretary section 3105 ALJs must be appointed to preside and such an interpretation certainly has its merits. To be sure, to clear the air on this matter such a finding is certainly desirable, but I cannot agree that the lack of the finding requires the Commission to provide section 3105 ALJs. In my view, the language of subsection 1631(d) (2) by its own operation completely supersedes the requirements of subsection 556 (b) and relieves the Commission of the responsibility and the duty of providing section 3105 ALJS.

In reaching this conclusion I am not unmindful of the concern that failure to appoint section 3105 ALJs could result in an adverse court decision, i.e., a decision that ALJs are required, thereby necessitating the rehearing of many cases under title XVI. However, I think that the language of the Supreme Court in a recent decision sufficiently allays this concern. (Richardson v. Perales, 402 U.S. 389 (1971)). In that case Perales challenged the procedures employed in OASDI hearings, procedures which, as noted above, are based on statutory provisions, which are closely akin to those in title XVI. One of Perales claims was that the APA should be applicable to OASDI proceedings. He argued that since the hearing examiner has the responsibility for gathering the evidence he would naturally lean toward a decision in favor of the evidence he had gathered and that "an independent hearing examiner such as in the Longshoremen's and Harbor Workers' Compensation Act should be provided." (id. at 409). The Court declined to decide the question of the general application of the APA, thereby leaving intact the Fifth Circuit's holding that it was not applicable. (See Perales v. Cohen, 412 F. 2d 44 (5th Cir. 1969)). But it did explicitly reject the hearing examiner contention :

"Neither are we persuaded by the advocate-judge multiple-hat suggestion. It assumes too much and would bring down too many procedures designed, and working well, for a governmental structure of great and growing complexity. The social security hearing examiner, furthermore, does not act as counsel. He acts as an examiner charged with developing the facts. The 44.2% reversal rate for all federal disability hearings in cases where a state agency does not grant benefits... attests to the fairness of the system and refutes the implication of impropriety." (Richardson v. Perales, supra, at 410).

This language seems clearly to indicate that the Supreme Court feels that the requirements of due process do not demand the elastic adversary-type hearing in social security disability hearings, (and I don't believe anyone would seriously contend that the present disability hearings are of this adversary nature). Instead, the Court only requires that these hearings be fundamentally, fair (Richardson v. Perales, supra, at 410). It is therefore unlikely that the Court would require more highly-adversary type hearings in the closely similar hearings which will be held under title XVI, i.e., hearings which would require section 3105 ALJs. A further practical consideration in this regard is the ninety day time limit for determinations in title XVI hearings imposed by subsection 1631(c) (2). Even under the present nonadversary disability proceedings, final determinations are seldom, if ever, reached in ninety days. To impose the adjudicatory formalities concomitant with more-highly adversary hearings before an ALJ would certainly make the ninety day limit unobtainable. Therefore, I do not feel that Congress contemplated, nor would the courts require, that the procedure accorded to the classic type of adversary hearings be accorded under title XVI. It seems to me that what is said above that Congress contemplated a system similar to that presently employed in OASDI proceedings which, although ensuring most of the fundamental procedural safeguards of the APA, does not require appointment and presence of ALJS.

You have pointed out on page 2 of your letter that even if the Secretary makes a finding and appoints presiding officers other than section 3105 ALJS, you feel that the HEW performance rating system would not be applicable to these presiding officers. I agree that agency control over these employees should be kept to a minimum in order to insure their impartiality, and that the Secretary should take those steps he deems necessary toward this end. It should be noted, however, that even section 3105 ALJs are not completely divorced from possible agency pressure since despite statutory exclusion of ALJs from agency performance ratings, (5

U.S.C. §§ 4301, 4302), an agency may still initiate removal proceedings. (5 CFR §§ 930.221 et seq.).

As I noted above, a specific finding by the Secretary would eliminate all doubt as to whether ALJs were required, and I understand from page 2 of your letter that you agree with this position. As well as ensuring that we are on sound legal ground, think such a finding would be administratively desirable. Fulfillment of SSA's responsibilities under title XVI will require the appointment of a large number of presiding officers, perhaps as many as 400. It has not been argued that the work of these examiners would justify classification at the GS-15 and GS-16 levels that are usually reserved for section 3105 ALJs and, in fact, your Department has requested ALJs at grade levels of 13 and 14 to preside at SSI hearings. From a strictly administrative standpoint, it would appear beneficial for your Department to maintain the authority and power to fill these positions rather than relying on ALJ registers of the Commission which may not, at least initially, provide a sufficient number of ALJS who are (1) qualified and (2) will accept work at these grade levels. In addition, maintaining the appointment power at HEW would provide greater administrative flexibility within the SSI program. As a result, individuals appointed as hearing examiners could be freely moved into and out of the program as they acquired the necessary experience and expertise to assume different positions.

In summary, it is my view that the language of title XVI, the related legislative history, and pertinent court decision indicate that the Commission is not required to provide section 3105 ALJs to preside at SSI hearings. In addition, administrative considerations favor the proposition that maintenance of the appointment power for these positions should rest with HEW not the Commission. Therefore, I feel that the Commission's Office of Administration Law Judges may properly refuse your Department's request for section 3105 ALJs for these hearings.

Sincerely yours,

Hon. CASPAR W. WEINBERGER,

ANTHONY L. MONDELLO,
General Counsel.

U.S. CIVIL SERVICE COMMISSION, Washington, D.C., December 14, 1973.

Secretary of Health, Education, and Welfare,
Washington, D.C.

DEAR MR. SECRETARY: This has further reference to your letter of October 12, 1973, regarding the implementation of the new Supplemental Security Income Program established by Public Law 92-603, for which a large number of hearing officers will be necessary, and my responding letter of October 30, 1973.

Following that exchange of correspondence, the Commission received a number of representations for reconsideration of the question of whether these positions should be filled by Administrative Law Judges under the Administrative Procedure Act, and further that the issue be decided by the full Commission. A Commission meeting on the issue was held on December 3, 1973, at which time information was submitted to the Commissioners by representatives of your Department and interested professional associations. Following the Commission meeting Deputy Commissioner Arthur Hess and others made further written representations to the Commission. (A summary of the December 3 meeting is attached.)

This question on the requirements for Administrative Law Judges appointed under section 3105 of title 5, United States Code (hereinafter ALJS), has been the subject of extensive analysis and consideration both with regard to the legal issue of whether ALJs are required for title XVI hearings, as well as the issue of whether as a matter of policy ALJS should preside over these hearings. Upon considering this matter further, it is the conclusion of the Commission that the legal issue is paramount and must control its decision in this case. In the absence of a statute which requires ALJs as mandated by section 554 and 3105 of title 5, United States Code, and section 930.203 (c), Code of Federal Regulations, the Commission will not depart from the command of these provisions.

With respect to staffing problems facing the Department, namely, the classification of the SSI hearing officer positions in the APA ALJ GS-935 series, you recognize on page 4 of your letter of October 12 that this classification series is restricted in its coverage to positions coming within the purview of the APA,