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CALIFANO V. YAMASAKI, 442 U. S. 682 (1979)

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U.S. Supreme Court

Califano v. Yamasaki, 442 U.S. 682 (1979)

Califano v. Yamasaki

No. 77-1511

Argued March 19, 1979

Decided June 20, 1979

442 U.S. 682


Section 204(a)(1) of the Social Security Act (Act) authorizes the Secretary of the Department of Health, Education, and Welfare to recoup erroneous overpayments made to a beneficiary under the old-age, survivors', or disability insurance programs by decreasing future payments to which the overpaid person is entitled. However, § 204(b) commands that

"there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment would defeat the purpose of this subchapter or would be against equity and good conscience."

Under the Secretary's practice, after an ex parte determination is made under § 204(a) that an overpayment has been made, and after the recipient is notified of that determination, the recipient may file a written request seeking reconsideration of the determination or asking the Secretary to waive recovery in accordance with § 204(b). If, upon review of the papers, the decision goes against the recipient, recoupment begins, and the recipient is given an opportunity for an oral hearing only if he thereafter continues to object to recoupment. The recipient may seek subsequent administrative review, and finally may seek review by a federal court under § 205(g) of the Act, which provides that any person, after any final decision of the Secretary made after a hearing to which he was a party, may obtain review of the decision by instituting a civil action. Respondents, who had unsuccessfully sought administrative relief from recoupment determinations, instituted federal actions, alleging that, because they had not been given adequate notice and an opportunity for an oral hearing before recoupment began, the recoupment procedures violated both § 204 and the Due Process Clause of the Fifth Amendment. In each action, class certification was sought, and, in one action, it was requested that the class be nationwide. The respective District Courts granted class certification, held that the Secretary's recoupment procedures were unconstitutional, and ordered injunctive relief. The Court of Appeals consolidated the cases on appeal and upheld the certification of the classes. On the merits, the court, without directly addressing respondents' statutory claims, held, inter alia, that, when waiver of recoupment chanroblesvirtualawlibrary

Page 442 U. S. 683

was requested pursuant to § 204(b), the Due Process Clause required that the recipient be given an oral hearing before recoupment began, but that a prior hearing was not required in § 204(a) reconsideration cases if the dispute centered on a computational error or a payment problem not demanding an evaluation of credibility.


1. Recipients who file a written request for waiver under § 204(b) are entitled to the opportunity for a pre-recoupment oral hearing, but those who merely request reconsideration under § 204(a) are not so entitled. Pp. 442 U. S. 692-697.

(a) On its face, § 204 requires that the Secretary make a pre-recoupment waiver decision, and that the decision, like that concerning the fact of the overpayment, be accurate. Pp. 442 U. S. 693-695.

(b) Neither § 204 nor the standards of the Due Process Clause require pre-recoupment oral hearings as to requests under § 204(a) for reconsideration as to whether overpayment occurred. The rare instance in which a credibility dispute is relevant to a § 204(a) claim is not sufficient to require the Secretary to grant a hearing to the few requests that involve credibility. However, with respect to § 204(b) waiver of the Secretary's right to recoup, the nature of the statutory standards involving determinations of "fault" and whether recoupment would be "against equity and good conscience" makes a pre-recoupment oral hearing essential when a recipient requests waiver. Pp. 442 U. S. 695-697.

2. Nothing in § 205(g) prohibits the pre-recoupment hearing relief awarded in this case. Pp. 442 U. S. 697-706.

(a) Where a district court has jurisdiction over the claims of the members of the class in accordance with the requirements set out in § 205(g), it also has discretion under Fed.Rule Civ.Proc. 23 to certify a class action for the litigation of those claims. Pp. 442 U. S. 698-701.

(b) There was no abuse of discretion in certifying a nationwide class. Pp. 442 U. S. 701-703.

(c) While the classes certified here exceed the bounds permitted by § 205(g)'s "final decision" requirement because they include persons who have not filed requests for reconsideration or waiver in the past and will not do so in the future, nevertheless there is no basis for altering the relief actually granted, as it did not include those who do not meet such requirement. Pp. 442 U. S. 703-704.

(d) Injunctive relief may be awarded in a § 205(g) proceeding, nothing in either the language or the legislative history of the statute indicating that Congress intended to preclude injunctive relief. Pp. 442 U. S. 704-706.

564 F.2d 1219, affirmed in part and reversed in part. chanroblesvirtualawlibrary

Page 442 U. S. 684

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