Matthews V. Eldridge

Matthews v. Eldridge

I. Facts of the Case

Respondent George Eldridge, of Virginia, was first awarded disability benefits following an evidentiary hearing in June of 1968. Respt.’s Br. 3 (May 6, 1975). He was found to be permanently disabled due to chronic anxiety and back strain, and was subsequently diagnosed with diabetes. Id. Mr. Eldridge was advised that hiscase would be reviewed in June 1969 to determine if he still qualified for the disability benefits.Id. In February 1970, the State determined that his disability had ceased and his benefits were subsequently terminated. Id. In April of the same year Mr. Eldridge requested a reconsideration of his case. In August 1970 he filed suit in district court seeking an evidentiary hearing before the termination of his benefits. Id. The district court ordered thathis disability benefit payments be continued during the pendency of his claim.Id. In March 1971 Mr. Eldridge was granted an evidentiary hearing, and it was determined by the hearing officer that his disability had in fact not ceased, and thus,his benefits were not terminated. Id. The elapsed time between the initial decision that he was no longer disabled, and the evidentiary hearing, was approximately eighteen months. Id.

In March of 1972, the State again opted to review Mr. Eldridge’s eligibility for benefits in the form of a questionnaire. Id. Mr. Eldridge completed the questionnaire and indicated that his anxiety and back strain had not improved and provided medical sources to corroborate this. Id.Upon receiving the response, the state agency obtained further medical reports from his physicians and psychiatrist. Id. Based on those reports and the other information in his file, the State made a tentative determination that Mr. Eldridge’s disability had ceased in May of 1972. Id. A letter was sent to Mr. Eldridge notifying him of the determination, advising him of the agency’s reasoning and of the opportunity to submit additional information regarding his condition. Id.

Mr. Eldridge sent a reply letter to the State, in it hestated that he had “arthritis of the spine” and not back strain, and indicated that they already had “enough evidence” to find that his condition had not improved. The State then made a final determination that his disability had ceased in May 1972. Id. This determination was subsequently approved by the federalSocial Security Administration, which notified Mr. Eldridge in July of 1972 that his disability benefits would stop at the end of that month. Id. The notification advised him that he could seek reconsideration of the determination within six months. Id.

Mr. Eldridge decided not to seek reconsideration, and instead filed suit in District Court against theSecretary of Health, Education and Welfare, thehead of the Social Security Administration. The suit challenged the constitutionality of the Social Security Administration’s procedures in revoking benefits.

II. Nature and Controversy leading to the case

The disability benefits at issue in Mathews v. Eldridge are part of the Social Security program of the federal government, which is administered through the Social Security Administration. The Social Security program began under President Franklin Roosevelt following the Great Depression in 1935. last updated Oct. 1, 2007. The program was part of an effort to promote greater economic security for elderlyAmericans through a social insurance plan that would pay benefits to those who paid into the system. Id. It was, and continues to be, a social insurance plan separate from our social welfare plan. Initially, Social Security only paid benefits to retired workers age 65 or older. Id.

Disability insurance was added to the Social Security program in 1956. Id. Its purpose was to pay benefits to workers, their spouses, and dependentsthat are unable to work due to a medical condition. Id. Further, applicants must show that the condition is expected to last at least twelve months, or result in death; that they are under the age of 65; and that theyworked at least five out of the last ten years. ww.en.wikipedia.org/wiki/Social_Security_Disability_Insurance, last up dated Oct. 5, 2007. Disability benefits are paid to workers during periods when they are completely disabled and therefore unable to work. Id. In order to remain eligible for disability benefits, the recipient must show that “he has a physical or mental impairment of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy . . .” Mathews v. Eldridge, 424 U.S. 319, 336, (1976).

Mathews was decided by the Supreme Court in 1976, six years after its decision in Goldberg v. Kelly. In Goldberg, the situation was similar to that in Mathews except that the benefits at issue were welfare instead of disability. 397 U.S. 254 (1970). Because of the “individual’s overpowering need in this unique situation not to be wrongly deprived of assistance”, the Court in Goldberg held that prior to termination of welfare benefits, the due process clause of the 5th amendment required an evidentiary hearing. Id. at 261. The Court reached this result based on a balancing test weighing the welfare recipient’s interest in uninterrupted benefits, versus the government’s interest in conserving fiscal and administrative resources. Id. at 271.

The Court in Mathews expanded upon the balancing test used in Goldberg to include three factors: 1) the private interest that will be affected by the government’s action, 2) the risk of an erroneous deprivation of such interest through the procedures used and the probable value, if any, of additional or substitute procedural safeguards, and 3) the government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. 424 U.S. at 335.

For the first factor, the private interests affected, the Court in Mathews distinguished welfare benefits from disability benefits. Id. at 340-314. It found that eligibility for disability benefits, in contrast to welfare benefits, is not based upon financial need. Id. Because of this, the Court found that “the disabled worker’s need is likely to be less than that of a welfare recipient”. Id. at 324. The Court also suggested that because a person whose disability benefits have been cut off could still go on welfare, their need for a hearing prior to termination was not as great. Id.

The Court also distinguished the second factor – the fairness and reliability of existing pre-termination procedures, and the probable value, if any, of additional safeguards. The Court in Goldberg noted that in the determination of continued eligibility for welfare benefits, a wider variety of information can be necessary and issues of witness credibility can be critical to the decision making process. 397 U.S. at 269. These circumstances make written documentation less helpful and as the Court in Goldberg found, inadequate. Id.

Therefore, the Court held that oral presentations were better suited to the circumstances and to the recipients. Id. In contrast, the determination for continued eligibility for disability benefits is based on a medical assessment of the recipient’s physical or mental condition which is largely based on written documentation by medical professionals. Mathews, 424 U.S. at 344. Given the differences inherent in the two types of determinations, the Court in Mathews found written documentation to be procedurally adequate. Id.

The Court did not distinguish the final factor, the government’s interest affected, finding that the interest in conserving scarce fiscal and administrative resources was the same in the decision making process for both welfare and disability benefits. Id. at 348. In both instances, the requirement of pre-termination hearings would result in more hearings and the expense of providing continued benefits to ineligible recipients pending a final decision would increase dramatically. Mathews, 424 U.S. at 348; Goldberg, 397 U.S. at 266. Both would undoubtedly also lead to increased use of administrative resources. Id.

Based on a balancing of the above factors, the Court in Mathews declined to extend its ruling in Goldberg, and held “that an evidentiary hearing is not required prior to the termination of disability benefits and that the present administrative procedures fully comport with due process”. 424 U.S. at 349.

III. Issues faced by litigants and lawyers

The Court in Goldberg held that “the extent to which procedural due process must be afforded to the recipient is influenced by the extent to which he may be condemned to suffer grievous loss.” 397 U.S. at 262-263. Mr. Eldridge was a widower with six dependant children. Respt.’sBr. 6. According to the Amicus Brief by the AFL-CIO, “when a disabled worker’s benefits are terminated, the benefits paid directly to his dependent children are cut off at the same time.” Amicus Br. 2 (May 1, 1975). Carl E. McAfee, one of the attorneys for Mr. Eldridge stated, “. . . the hardships that Mr. Eldridge and his family suffered without his benefits were very evident.” Mr. McAfee believes that this was further illustrated by the fact that every time Mr. Eldridge was given an opportunity to present his case at an evidentiary hearing, his benefits were reinstated. According to Mr. McAfee, this happened twice before the specific case that led to the Supreme Court case, and at least once after the decision came down. But because of the Supreme Court’s decision, Mr. Eldridge and his children were forced to live without their benefits while awaiting an evidentiary hearing. Indeed, Justice Brennan wrote in the dissent that “the Court’s assertion that the discontinuance of disability benefits may cause the recipient to suffer only a limited deprivation is no argument, but merely speculation.” 424 U.S. at 350. This argument is strongly backed by the fact that Mr. Eldridge’s house was foreclosed and all of his furniture repossessed. Id.

When asked about the Court’s decision, Mr. McAfee states that “still now some thirty years after, [he] firmly believe[s] that the court did not make the correct decision.” He staunchly believes that the argument made in favor of Mr. Eldridge was solid, and that Mr. Eldridge’s case was the strongest possible example of why a pre-termination hearing should have been granted prior to the termination of benefits. He says that “the facts just were what they were, and you can’t change those facts, but for some reason the Supreme Court decided the way they did, maybe they saw the process independent of the facts, I don’t know . . .”. As the District Court for the Western District of Virginia pointed out, “the legal criterion for Title II disability benefits is whether the beneficiary continues to be unable to engage in substantial gainful activity . . . and to cut off payments erroneously may create a loss as grievous as that which concerned the Supreme Court in the cases of welfare and old age beneficiaries.” Matthews,361 F. Supp. at 523. Mr. McAfee states that this was the whole reasoning behind requiring the pre-termination evidentiary hearing. That because the erroneous determination in Mr. Eldridge’s case caused him great hardships, it was likely that there were others out there like him, and even if it was a small percentage, they nonetheless deserved their constitutional given right to due process.

The Court in Eldridgedistinguished the facts from Goldberg on the basis that a determination on disability is an objective medical decision made by a “team” consisting of a physician and non-medical person specifically trained in disability evaluation, and based on “unbiased medical reports.” 424 U.S. at 344. Whereas a determination of need for welfare is not as sharply focused and easily documented. Id. But the Court itself recognized that “[t]he decision is not purely a question of the accuracy of a medical diagnosis, since the ultimate issue which the state agency must resolve is whether in light of the particular worker’s age, education, and work experience, he cannot engage in any substantial gainful work which exists in the national economy...” Id. at 345 (emphasis added). The court reconciles this contradiction by stating that these “characteristics [are] amendable to effective written presentation.” Id. But even just considering the objective medical evidence can be cumbersome, as the American Medical Association “labeled disability an‘elusive concept’.” Amicus Br. 12. (citing Hearings on H.R. 7225 Before the Senate Comm. On Finance, 84th Cong., 2d Sess., pp. 833-836 (1956)).

However, at least in the case of Mr. Eldridge (on three separate occasions), written presentation was not enough to merit the same result as an evidentiary hearing. Further, in an evidentiary hearing, the hearing officer may consider the “subjective evidence of pain and disability testified to by claimant, and corroborated by his wife and neighbors.” Respt.’s Br. 9. (citing Underwood v. Ribicoff, 298 F.2d 850, 851 (4thCir. 1962)). Mr. Eldridge’s case “emphasizes the non-reliability of the termination procedures . . . these procedures [were] shown to be inaccurate and wrong.” Respt.’s Br. 6. And again the staunch difference was the year and half that the recipient, in this case Mr. Eldridge, would have to survive without benefits until the evidentiary hearing.

A point raised in the Amicus Brief was that “moving the evidentiary hearing from the post to the pre-termination stage would not necessarily increase the number of recipients requesting such hearings.” Amicus Br. 4. This point is based on the notion that currently, post-evidentiary hearings are accorded only in disputed cases and not in those which the “paper hearing” is accepted. Id. This would, at least partially, counter the Supreme Courts assertion that the pre-termination hearings would come at a great cost to the public. Id.;Matthews, 424 U.S. at 344.

The AFL-CIO brief further states that the small risk of increased cost, combined with a high reversal rate, which it believed to be approximately 58.6%, was further reasoning to require a pre-termination hearing. Amicus Br. 7. However, the Supreme Court seemed tonot spend too much time addressing the reversal rate statistics, only to say that “[b]are statistics rarely provide a satisfactory measure of the fairness of a decision making process.” Matthews, 424U.S. at 346. Ultimately, the Court opted to go with the reversal rate provided by the Secretary, of under 4%, and added “. . . that although [they] view such information as relevant, it is certainly not controlling in this case.” Id. at 347. The Court also did not address the fact that Mr. Eldridge’s case had already been reversed multiple times.

As Mr. McAfee stated, “the facts just were what they were, and you can’t change those facts, but for some reason the Supreme Court decided the way they did, maybe they saw the process independent of the facts, I don’t know . . . .”

IV. Lasting effect of the case

Mathews was a landmark decision that established the analytical framework for deciding procedural due process issues. In writing the opinion of the Court, Justice Powell tried to settle the problem of whether too much or too little protection of the process had arisen since Goldberg. To tackle this problem, Justice Powell developed a three factor test for resolving the constitutional sufficiency of administrative procedures prior to the termination of benefits.This test has since been applied in numeroussubsequent cases. Prior to this case, it was held that the fundamental requirement of due process is the opportunity to be heard at meaningful time and in a meaningful manner.It was understood that due process was not a technical concept with fixed content unrelated to time, place,and circumstances; rather, it is flexible and calls for such procedural protections as a particular situationmay demand.

In Matthews, the Court concluded that an evidentiary hearing was not required prior to the termination of disability benefits, and that the present administrative procedures fully comported with constitutional due process requirements. The important part of the case is not merely the decision, but the establishment of the three-factor balancing test. The Court, noting that due process was flexible and called for such procedural protections as particular situations demand, set forth the three-factor test..

The three factors of the Court’s procedural due process test are: (1) the private interest that will be affected by official action; (2) the risk of erroneous deprivation of such interest through the procedures used and the probable value, if any, of additional or substitute procedural safeguards and (3) the government's interest, including function involved and fiscal and administrative burdens that additional or substitute procedural requirements would entail. These factors are applied, then weighed to determine which side’s interests outweigh the other. On the individual's side of the balancing test, a court must assess two factors:(1) the importance of the individual liberty or property interest at stake and (2) the extent to which the requested procedure may reduce the possibility of erroneous decision-making.On the other side of the scale, the court must assess the governmental interest in avoiding increased administrative and fiscal burdens which result from increased procedural requirements.

For example, let’s suppose that:

• X= private interest that will be affected by official action;
• Y= the risk of erroneous deprivation of such interest through the procedures used and the probable value, if any, of additional or substitute procedural safeguards;
• Z= government's interest, including function involved and fiscal and administrative burdens that additional or substitute procedural requirements would entail.

If X+Y>Z,that means the current protection for the due process is not enough.If X+Y<Z that means just the contrary.