Historic Class Action Settlement Provides New Hearings and Protections To Thousands of Disabled New Yorkers Wrongly Denied Social Security Benefits

January 14, 2013

Late Friday evening, lawyers for the Urban Justice Center’s Mental Health Project and the international law firm Gibson, Dunn & Crutcher reached a major settlement of a class action lawsuit brought against the Social Security Administration based on systematic bias against disabled claimants.  Under the settlement, approximately 4,000 New Yorkers denied Social Security disability benefits in Queens will be entitled to receive new hearings.  It also includes measures to protect due process rights and ensure the provision of fair and full hearings in future claims.  The settlement is the largest of its kind and provides unprecedented relief.

On April 12, 2011, these lawyers filed the lawsuit on behalf of thousands of disabled New Yorkers, who had been systematically denied fair hearings for Social Security disability benefits because of five biased administrative law judges (“ALJs”), who sit and decide cases in the Office of Disability Adjudication and Review in Queens ("QODAR").  The 103-page complaint provided detailed evidence of unprofessional conduct by these five ALJs, who routinely violated the law and their duties.  All five ALJs routinely and systematically refused to follow the law, ignored evidence that supported benefits awards, bullied and sought to demean disabled claimants, and refused to follow instructions from higher courts.  Reviewing courts often offered scathing assessments of the ALJs’ unprofessional conduct, calling their opinions, “deficient,” “incoherent,” “plucked from thin air,” “arbitrary,” and “illogical.”  Reviewing courts further decried ALJ conduct that was “particularly egregious,” “exhibit[ing] bias,” showing “inappropriate hostility” toward benefit claimants, peppering claimants with “combative questioning,” showing “serious negligence,” and “trivializing” claimant impairments.  This conduct in Queens had gone on for years before the lawsuit.

At the time the lawsuit was filed, QODAR, which had eight ALJs in all, ranked third highest in the United States in its denials of Social Security benefits.  The five named ALJs, in particular, were among the highest claims-deniers nationally.  They had staggering reversal rates:  more than 80% of their cases were reversed on appeal. 

This case and settlement are unprecedented.  No prior case alleged systematic bias among multiple ALJs in the same office, or of the Hearing Office’s Chief ALJ.  No case resulted in the replacement of the Hearing Office Chief ALJ.  This settlement represents the first time the Social Security Administration provided forward-looking relief for a prospective class of plaintiffs for claims yet-to-be filed.  It is also the first time Social Security has agreed to monitor a group of specific ALJs with heightened internal review on a go-forward basis.  Specifically, the settlement ensures several forms of relief:

• Critically, the settlement guarantees that every person denied benefits by these five ALJs between January 1, 2008 and the date of the settlement’s approval will be given a new, full hearing before an unbiased judge.  Thus, Social Security claimants in Queens will finally receive due process of law before fair judges.  This relief covers the entire span of the time alleged in the lawsuit, more than five years, which means relief for thousands of disabled individuals.
• QODAR ALJ David N. Nisnewitz, accused in the lawsuit of fostering anti-claimant- bias among most ALJs in his Office, has been replaced as the office’s Hearing Office Chief ALJ.  The settlement ensures that all five ALJs named in the lawsuit—Nisnewitz, Michael “Manuel” Cofresi, Seymour Fier, Marilyn P. Hoppenfeld, and Hazel C. Strauss—will receive comprehensive retraining by the Social Security Administration.  The Social Security Administration also agreed to promulgate and enforce a new policy prohibiting anti-claimant bias. 
• Under the terms of the settlement, these ALJs’ decisions will be monitored by a new, special unit within the Social Security Administration to ensure the fair adjudication of claims.  The settlement guarantees that, during the 30-month period after the settlement is approved, any claimant wrongly denied benefits by ALJs will automatically have their claim reviewed by the special review unit, and, if granted a new hearing, will have a right to a new hearing before other ALJs.  Outside of this settlement, claims on appeal from any particular hearing office are reviewed by several scattered branches within the Social Security Administration, and even if granted a new hearing, a claimant on appeal returned to the same ALJ, or to one in the same hearing office.
• The Social Security Administration further agreed to pay substantial legal fees to the Urban Justice Center for its work in the lawsuit.  Gibson Dunn agreed to waive any costs and fees it incurred in the litigation.

Job protection rules, favoring these ALJs, forestalled attempts to disqualify them entirely from Social Security cases.  As part of the settlement, the Social Security Administration did not admit or deny the allegations of the lawsuit.  However, data recently released by the Social Security Administration already shows that, since the filing of this lawsuit, QODAR’s denial rates have improved significantly and are now more in line with national averages.

“This settlement provides historic relief for our clients and all class members,” said Emilia Sicilia, Director of the Disability Advocacy Project at the Urban Justice Center’s Mental Health Project.  “For years, these biased ALJs have used every rationale to deny eligible claims—many class members have been forced to rely on friends, family or public assistance simply to afford necessities while their claims languished, only to be unfairly denied by these ALJs.  Some even became homeless when they were unable to pay their rent.  We are thrilled that these vulnerable individuals will now receive fair hearings in Queens.”

Jim Walden, the partner in charge of Gibson Dunn’s Pro Bono program in New York, said, “Social Security Administration officials in Washington deserve real credit for quickly settling the lawsuit and committing to meaningful relief, reform, and monitoring based on the disgraceful conduct at the Queens office.  But we will remain vigilant to ensure this settlement provides what these claimants deserve:  fair treatment, according to the rules.”

“We can’t ever sit idle when bureaucracy turns a blind eye to people in need.  These are precisely the people Social Security is supposed to protect, and it’s unconscionable so many were wrongfully denied aid they rightfully deserved.  This is long-overdue justice,” said Public Advocate Bill de Blasio, a supporter of the lawsuit.

Raun Rasmussen, Executive Director of Legal Services NYC, also praised the result:  “As the City’s largest provider of disability advocacy services, we know first-hand that biased judges can prevent disabled individuals from getting a fair hearing and from receiving life saving benefits.  This settlement will go a significant way toward correcting problems that have existed for far too long at the QODAR.”

Now that the settlement has been reached, the court will review it for fairness and hear from class members at a hearing yet to be scheduled.  

Ian F. Feldman, Ann Biddle, and Emilia Sicilia are counsel for the Mental Health Project, Urban Justice Center.

Jim Walden, Oliver Olanoff, Adam Jantzi, and Karin Reiss of Gibson, Dunn & Crutcher LLP were the primary lawyers handling the litigation, and they were assisted by Tyler Amass, Jana Checa Chong, Sharon Grysman, Daniel Harris, William Moriarty, and Kyle Kolb of Gibson, Dunn & Crutcher.

The case is Padro, et al, v. Astrue and is in the U.S. District Court for the Eastern District of New York before the Honorable Carol Bagley Amon and the Honorable Magistrate Judge Roanne L. Mann.