United States Court of Appeals For the First Circuit No. 20-1377
MARIE V. PÁGAN-LISBOA; DANIEL JUSTINIANO-RAMÍREZ,
Plaintiffs, Appellants,
v.
SOCIAL SECURITY ADMINISTRATION; ANDREW M. SAUL, Commissioner of Social Security Administration,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, U.S. District Judge]
Before
Howard, Chief Judge, Lipez and Thompson, Circuit Judges.
Javier Andrés Colón Volgamore, for appellants. Jaynie Lilley, Attorney, Appellate Staff, United States Department of Justice, with whom Jeffrey Bossert Clark, Acting Assistant Attorney General, W. Stephen Muldrow, United States Attorney, and Mark B. Stern, Attorney, Appellate Staff, United States Department of Justice, were on brief, for appellees.
April 22, 2021 THOMPSON, Circuit Judge.
Setting the Stage
This case is fallout from what the Social Security
Administration did to Marie Págan-Lisboa and Daniel Justiniano-
Ramírez after José Hernández-González (a neurologist) and Samuel
Torres-Crespo (a nonattorney representative) copped to using fraud
to help people get disability-insurance benefits from that agency.
Statutory and Regulatory Regime
A federal statute says that the agency must "immediately
redetermine" whether a person actually deserved benefits when she
or he applied for them "if there is reason to believe that fraud
or similar fault was involved" in the application. See 42 U.S.C.
§ 405(u)(1)(A). Another part of the statute says that during the
redetermination process, the agency must "disregard any evidence"
in the benefits application "if there is reason to believe that
fraud or similar fault was involved in the providing of such
evidence." See id. § 405(u)(1)(B).
An agency manual envisions three situations in which the
"reason to believe" could materialize. One is when "[a]n [agency]
investigation . . . results in a finding of fraud or similar
fault." See Social Security Administration Hearings, Appeals, and
Litigation Manual ("HALLEX") § I-1-3-25.C.4.a., available at
https://www.ssa.gov/OP_Home/hallex/I-01/I-1-3-25.html. A second
- 2 - is when the agency receives "[a] referral based on information
obtained during a criminal or other law enforcement
investigation." Id. And a third is when the agency's inspector
general "refer[s] . . . information" to the agency. Id. Only
when the agency discovers the fraud can a beneficiary "object[] to
the disregarding of certain evidence"; and if the administrative
law judge ("ALJ") "is satisfied" that the evidence is not
fraudulent, "he or she will consider the evidence" — in the other
two situations she or he cannot. See id.
Agency Proceedings
We move now from the general to the specific.1 A team
of agency special adjudicators reviewed benefits cases containing
evidence from Hernández-González and Torres-Crespo, thinking — as
relevant here, though incorrectly as we will see — that the
inspector general had made a fraud referral. And that put Págan-
Lisboa and Justiniano-Ramírez in the agency's cross-hairs.
Págan-Lisboa is a former patient of Hernández-González
and a former client of Torres-Crespo. With their help, she applied
for and started getting disability benefits (or so the agency
writes, without contradiction). Relying on § 405(u), the agency
later notified her that it needed to redetermine her benefits
The background events are essentially undisputed for present 1
purposes. - 3 - eligibility because her "case contain[ed] evidence" from
"admitt[ed]" fraudsters Hernández-González and Torres-Crespo. The
agency added that while she could argue to an ALJ that she was
"entitled to benefits at the time of [her] original award," she
could "not argue that [the agency] should consider evidence from
[persons] who admitted they were guilty of making a false statement
to [the agency]." Together with her lawyer, Págan-Lisboa
participated in a hearing at which she testified. Ultimately,
though, after disregarding evidence from Hernández-González and
Torres-Crespo, the ALJ concluded that Págan-Lisboa did not have
enough evidence to support her initial benefits claim and so
terminated her benefits. And the agency's appeals council
affirmed.
Hernández-González also submitted evidence in support of
Justiniano-Ramírez's successful disability-benefits application
(or so the agency says, again without contradiction). Unlike what
it had done with Págan-Lisboa, however, the agency suspended
Justiniano-Ramírez's benefits following the special adjudicators'
review of the old applications when Hernández-González's and
Torres-Crespo's fraud came to light. Of note, the agency told him
about the criminal investigation into the fraud scheme, stated
that at least one "discredited source[] provided evidence in [his]
case," and explained that the benefits suspension would run through
- 4 - the "redetermin[ation]" process. A few weeks later, the agency
notified him that it had concluded, first, that because Hernández-
González had "provided incorrect, incomplete, or fraudulent
evidence to us, . . . fraud or similar fault was involved in" his
application; and, second, that he was not "entitled to benefits"
after disregarding the part of the application containing the
fraud. He requested and received an ALJ hearing at which his
lawyer — who also represented Págan-Lisboa — was present.2 But
after ignoring evidence from Hernández-González, the ALJ ended up
cancelling Justiniano-Ramírez's benefits, who then asked the
appeals council to review the ALJ's decision (we will discuss
shortly how the appeals council ruled).
District Court Proceedings
With his case pending before the appeals council,
Justiniano-Ramírez teamed up with Págan-Lisboa and sued the agency
for themselves and for a purported class of others similarly
situated. Running 73 pages and comprising 339 numbered paragraphs,
2 Taking a step back, we note that before the hearing, Justiniano-Ramírez (as relevant here) sued the agency — on behalf of himself and a putative class of persons similarly situated — calling the redetermination process unlawful. See Justiniano v. SSA, 876 F.3d 14, 18-19 (1st Cir. 2017). The district court dismissed the suit for failure to exhaust administrative remedies. Id. at 21. And we affirmed, adding that the then-existing circumstances did not justify a judicial waiver of the administrative-exhaustion requirement. Id. at 31. - 5 - the complaint alleged a variety of claims, including — as relevant
here — the following:
• The complaint quoted the ALJ as saying that "the [inspector
general] notified [the agency] that there was reason to
believe fraud was involved in certain cases . . . involving
evidence supplied by" Hernández-González and Torres-Crespo.
The complaint then noted that the agency's manual says that
benefits recipients cannot appeal the agency's decision to
disregard evidence that the agency's inspector general
flagged as likely a product of fraud. See HALLEX § I-1-3-
25.C.6.; see also Social Security Ruling 16-1p, 81 Fed. Reg.
13,436. And the complaint alleged that "[t]he ALJs erred"
here by "validating the[se] . . . administrative
instructions" and thus insulating the inspector general's
fraud findings from dispute. Hammering the point home, the
complaint complained that the ALJs "allow[ed]" the
"finding[s] of fraud without" giving the "implicated
person[s]" a chance "to meet the accusation[s] of fraud
against [them]." And, the complaint continued, by not giving
them the chance to fight the fraud allegation, the agency's
redetermination system flouted many legal requirements — an
important one being core requirements of procedural due
process.
- 6 - • The complaint asked the judge to judicially waive the
administrative-exhaustion requirement for Justiniano-Ramírez
and "all others similarly situated."
• And the complaint urged the judge to find that Págan-Lisboa
"was disabled" at all relevant times.3
A few months after the complaint's filing, the appeals
council affirmed the ALJ's decision in Justiniano-Ramírez's case.
Citing federal civil-procedure Rule 12(b)(6) and (b)(1),
the agency then moved to dismiss the federal suit in part, arguing
— so far as pertinent here — along these lines. Plaintiffs'
allegations about the redetermination process, the agency said,
did not state a claim for relief because the system satisfied all
legal requirements — including due process. Moving on, the agency
asserted that Justiniano-Ramírez had not challenged a "final"
agency action. While acknowledging that he had since exhausted
his administrative remedies, the agency stressed that he had not
amended his complaint to reflect that development. And the agency
insisted that his claim for waiver of the exhaustion requirement
was now moot. So according to the agency, the only claim left in
3The complaint also recites lots of legal conclusions and editorializing comments — discussing some due-process cases decided over the years, for instance, and offering a deep dive into legislative history — none of which a court can accept as true. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). - 7 - the case concerned whether the ALJ rightly found that Págan-
Lisboa's initial benefits application lacked sufficient evidence.
Opposing the agency's motion, Págan-Lisboa and
Justiniano-Ramírez — so far as relevant here — characterized the
central issue driving the suit as whether the agency can
"terminate[]" disability benefits in proceedings that "depriv[ed]"
them of their due-process rights by not letting them "contest the
existence of fraud in their cases." And to answer what they called
the "simple" question at stake here — whether "a government agency
[may] infringe on property and liberty rights without allowing
individuals to defend themselves" — they quoted a passage from a
divided decision by the Sixth Circuit saying that "refusing to
allow plaintiffs to rebut the [inspector general's] assertion of
fraud as to their individual applications violates the Due Process
Clause of the Fifth Amendment." See Hicks v. Comm'r of Soc. Sec.,
909 F.3d 786, 804 (6th Cir. 2018).
Days later, Págan-Lisboa and Justiniano-Ramírez also
moved to "[s]upplement" the complaint to allege that Justiniano-
Ramírez had exhausted his administrative remedies and to add a
"request[]" for "a finding of disability" for him. For support,
they cited federal civil-procedure rules 15(a)(1) (discussing
amendments as of right) and 15(d) (discussing supplementary
pleadings).
- 8 - Acting on the agency's motion to dismiss, the judge —
ruling in an electronic order — "agree[d]" with the agency that
"[p]laintiffs' challenges to the redetermination process . . .
fail to state a claim" for "relief" and that "[t]he only claim
pending before the [c]ourt is [Págan-Lisboa's] claim for review of
the [agency's] final decision regarding her [benefits]
entitlement."
The judge never ruled on plaintiffs' motion to
"supplement" the complaint, however.
Of crucial importance to this appeal, the agency — in a
major about-face — concluded after the dismissal that Págan-Lisboa
did have a right to show at a new redetermination proceeding that
her benefits application had no fraud and that the targeted
evidence was worth considering (the agency apparently still
believed in the dismissal of Justiniano-Ramírez's case on failure-
to-exhaust grounds). According to the agency, it "itself
determined that reason existed to believe that fraud was involved
in the prior proceedings." This matters because, as we noted
above, the agency's manual says that in cases where the agency —
rather than the inspector general or a prosecutor — discovers
evidence that may have been touched by fraud, the beneficiaries
can "object[] to the disregarding of certain evidence"; and if the
ALJ "is satisfied" that the evidence is not fraudulent, "he or she
- 9 - will consider the evidence." See HALLEX § I-1-3-25.C.4.a. And
having told the judge that it "decline[d] to continue with the
defense of [Págan-Lisboa's] case," the agency requested a remand
for further administrative proceedings under sentence four of 42
U.S.C. § 405(g). That provision empowers a district judge to
return a case to the agency by "enter[ing] . . . a judgment
affirming, modifying, or reversing" an agency decision "with or
without remanding the cause for a rehearing."
Before plaintiffs could respond to the agency's motion,
the judge granted the request and entered final judgment remanding
Págan-Lisboa's case to the agency, ordering the agency to reinstate
her benefits back to the date the agency terminated them (while
the agency worked on a new decision), and dismissing "all [other]
claims."
Which brings us to today.
Resolving Págan-Lisboa and Justiniano-Ramírez's Appeal
Págan-Lisboa and Justiniano-Ramírez think "the
[j]udgment should be reversed in its entirety." They make four
broad arguments. The first is that the judge wrongly dismissed
their "policy challenges" to the redetermination procedure. The
second is that the judge entered a defective sentence-four remand
and wrongly prevented Págan-Lisboa from opposing the agency's
remand request. The third is that the judge wrongly dismissed
- 10 - Justiniano-Ramírez's claims on failure-to-exhaust grounds. And
the fourth is that the judge should have "waive[d] the exhaustion"
requirement "for [the] class action members."
What looks like a complicated appeal is actually pretty
straightforward — as we now explain, using an analysis similar to
that in the agency's appellate brief.
Redetermination Procedure
Págan-Lisboa and Justiniano-Ramírez's lead brief spends
the most time refighting the failure-to-state-a-claim battle,
which again chiefly centered on whether they should get a chance
to counter the inspector general's (or prosecutor's) fraud
assertions — something we keep much in mind as we take on the
controversy before us. And this representative sample of their
many statements — offered to get us to reverse the judge's failure-
to-state-a-claim ruling — makes our point:
• Págan-Lisboa and Justiniano-Ramírez's lead brief says that
"[t]he termination policy implemented . . . violates [their]
due process rights by depriving them of the ability to contest
the existence of fraud in their cases." They took that
language nearly word-for-word from their motion-to-dismiss
opposition. There they contended "that the termination
policy implemented . . . violates their due process rights by
- 11 - depriving them of the ability to contest the existence of
fraud in their case[s]."
• More, Págan-Lisboa and Justiniano-Ramírez's lead brief states
that
[t]he . . . redetermination policy violates due process by: 1) not giving adequate notice, 2) not disclosing the evidence on which the redetermination is based, 3) not allowing a challenge of the adverse evidence, 4) not making individualized findings of fact, 5) not allowing a challenge of the redetermination, 6) shopping for adjudicators that are far and disconnected from the appellants' circumstances and partial towards the [agency], 7) ignoring existing statutory dispositions, and 8) ignoring existing regulatory dispositions.
That is basically a recycled argument from their motion-to-
dismiss opposition, which was that
[t]he . . . redetermination policy violates due process by: 1) not giving adequate notice, 2) not disclosing the evidence on which the redeterminations were based, 3) not allowing them to challenge the evidence, 4) not making individualized findings of fact, 5) not allowing them to challenge the redetermination, 6) shopping for adjudicators that are far and disconnected from their circumstances and are partial towards the [agency,] 7) not applying existing statutory dispositions, [and] 8) not applying existing regulatory dispositions.
• More still, Págan-Lisboa and Justiniano-Ramírez's lead brief
insists that "[t]he [agency] argues that the fiscal and
administrative burdens to the government outweigh the risks
- 12 - and hardships caused by erroneous deprivation to the
individuals; therefore the policy doesn't violate the
Constitution." That is virtually the same charge appearing
in their motion-to-dismiss opposition, which was that "[t]he
[agency] argues that no constitutional rights are involved
because the fiscal and administrative burdens to the
government outweigh the risk and hardships caused by
erroneous deprivation, therefore the policy doesn't violate
the Constitution."
• Even more, Págan-Lisboa and Justiniano-Ramírez's lead brief
declares that a "[c]ourt does not owe deference to" an
agency's "statutory interpretations" that "unreasonab[ly]"
stopped them from showing their evidence was not tainted by
fraud. That essentially echoes an argument given in their
motion-to-dismiss opposition, which said that a "[c]ourt does
not owe deference to [an agency's] unreasonable
interpretations of the law."
• Even more still, Págan-Lisboa and Justiniano-Ramírez's lead
brief seeks refuge in Hicks. The Sixth Circuit there, they
write (though emphasis ours), "already" stamped "the specific
policy at hand" "unconstitutional." Making their position
crystal clear, they insist (quoting Hicks, but again emphasis
ours) that the Sixth Circuit shot down the very same arguments
- 13 - the agency offers here when it held that "refusing to allow
plaintiffs to rebut the [inspector general's] assertion of
fraud as to their individual applications violates the Due
Process Clause of the Fifth Amendment." See 909 F.3d at 804.
Hicks, they write, "is not binding on First Circuit courts
but it is binding on the agency everywhere [the agency]
operates" — the agency (again, still quoting them) "cannot
treat a policy as unconstitutional for citizens in some states
and as constitutional for citizens in other states." All of
that is a rehash of arguments they floated below in the hopes
of fending off dismissal, seeing how they stressed there (once
again, emphasis ours) that Hicks "found" the "same agency
policy" to be "unconstitutional."
• And even more still, Págan-Lisboa and Justiniano-Ramírez's
lead brief argues at length that statutory language and
legislative history undercut the agency's motion-to-dismiss
theories. Their motion-to-dismiss opposition alludes to
statutory-based arguments too.
That leads us to this point. By focusing their appellate
attack on an agency policy that they say wrongly makes the
inspector general's (or a prosecutor's) fraud accusation gospel,
Págan-Lisboa and Justiniano-Ramírez mistake the reality of their
situation. And that is because they ignore the agency's post-
- 14 - motion-to-dismiss concession that the agency — not the inspector
general (or a prosecutor) — discovered the fraud, meaning that per
agency policy, they must (and will, the agency says) get a chance
to persuade an ALJ that there is no reason to believe that the
complained-of evidence is fraudulent. The agency's brief captures
all this very nicely: "the agency erroneously treated these cases
as it would a referral from the [i]nspector [g]eneral" —
erroneously, because the agency "itself determined that reason
existed to believe that fraud was involved in the prior
proceedings"; so the agency "did not" (but now will) give
"plaintiffs . . . the opportunity to challenge the existence of
fraud in the provision of evidence" at the ALJ hearings, i.e., the
agency "did not" (but now will) give them "the opportunity which
they should have received under agency policy."
We judges work in an adversarial system, not an
inquisitorial one. See, e.g., United States v. Sineneng-Smith,
140 S. Ct. 1575, 1579 (2020); McNeil v. Wisconsin, 501 U.S. 171,
181 n.2 (1991). Which means we rely big-time on litigants for
evidence, research, and argument. See, e.g., Sineneng-Smith, 140
S. Ct. at 1579; McNeil, 501 U.S. at 181 n.2. So parties seeking
relief must properly identify the "issues for decision," Sineneng-
Smith, 140 S. Ct. at 1579, setting them "out . . . clearly,
highlighting the relevant facts and analyzing on-point authority,"
- 15 - Rodríguez v. Municipality of San Juan, 659 F.3d 168, 175 (1st Cir.
2011). Now, to repeat what we said a second ago (because it is so
important), Págan-Lisboa and Justiniano-Ramírez's lead brief
challenges an agency process — provided when the inspector general
(or a prosecutor) discovers the fraud, which per the manual is
unreviewable — that is not in play, thanks to the agency's
concession. See HALLEX § I-1-3-25.C.4.a.; id. § I-1-3.25.C.6.4
Their lead brief does not meaningfully contest the agency process
— provided when the agency discovers the fraud, which per the
manual lets beneficiaries object "to the disregarding of evidence"
— that is in play, again, thanks to the agency's concession. See
id. § I-1-3-25.C.4.a. And because they have not properly put the
at-issue process in dispute, their challenge to the
redetermination process is a nonstarter. See generally Rodríguez,
659 F.3d at 175-76 (discussing how not to litigate an issue on
appeal).
Taking a belt-and-suspenders approach, we note that to
the extent Págan-Lisboa and Justiniano-Ramírez believe their lead
brief does challenge the now-at-issue process, we would find that
challenge too "skeletal" or "confusingly constructed" and thus
waived. See id. (quotation marks and citations omitted). And to
4 Obviously then we need not decide whether the Sixth Circuit decided Hicks correctly, thus leaving that issue for another day. - 16 - the extent they think they fixed this problem in their reply brief
or at oral argument, we would consider that to be too late and
thus waived as well. See, e.g., United States v. Cruz-Ramos, 987
F.3d 27, 43 (1st Cir. 2021); Conduragis v. Prospect Chartercare,
LLC, 909 F.3d 516, 518 n.2 (1st Cir. 2018).
Sentence-Four Remand
Next up is Págan-Lisboa's protest about the judge's
sentence-four remand. As a reminder, sentence four of 42 U.S.C.
§ 405(g) authorizes a district judge "to enter . . . a judgment
affirming, modifying, or reversing" an agency's decision "with or
without remanding the cause for a rehearing." In Págan-Lisboa's
telling, the judge stumbled because he used sentence four without
specifying that he was affirming, modifying, or reversing the
agency's decision to cancel her benefits. But applying fresh-eyed
review (de novo review, in judge-talk), see Sacilowski v. Saul,
959 F.3d 431, 437 (1st Cir. 2020) (citing, among other authorities,
Seavey v. Barnhart, 276 F.3d 1, 9 (1st Cir. 2001)), we see no basis
to reverse on this issue.
Recall again what triggered the agency's remand request:
realizing it had used the wrong process, the agency found it could
no longer "continue with the defense of [Págan-Lisboa's] case" and
so conceded the need for new agency proceedings where she will now
get to explain why the ALJ can consider evidence labeled possibly
- 17 - fraudulent. And by granting the agency's request, the judge
recognized that the disputed redetermination decision could not
stand — there must be a redo. At least that is implicit in the
judge's judgment — also making us comfortable with this at-least-
that-is-implicit conclusion is that the judge ordered the agency
to put Págan-Lisboa in the position she was in benefits-wise before
the agency's redetermination decision. See generally Hicks v.
Berryhill, No. 16-154, 2017 WL 1227929, at *3 (E.D. Ky. Mar. 31,
2017) (noting that because the agency's redetermination decision
"is reversed," the agency "must . . . return [the beneficiary] to
the position she was in before the agency's decision"). Given
these circumstances, we conclude that the judge's remand was a
reversal — particularly since the Supreme Court says sentence four
applies to cases where the agency "has failed to provide a full
and fair hearing, to make explicit findings, or to have correctly
appl[ied] the law and regulations." See Melkonyan v. Sullivan,
501 U.S. 89, 101 (1991) (emphasis added and citation omitted); see
also Hicks, 2017 WL 1227929, at *1-2 (concluding that a sentence-
four remand — entered without the judge deciding whether the
agency's decision to cancel benefits "was right or wrong" —
amounted to a reversal of the agency's decision, because if the
agency's "process cannot be trusted, neither can its result," and
so "[i]ts result . . . cannot stand" even if the beneficiary "might
- 18 - lose on remand"; also arguing by analogy that a "[c]ourt would not
grant a defendant a new trial and yet keep his conviction in place"
(quotation marks and citation omitted)). For the future, however,
we ask judges using their sentence-four powers to please say
explicitly whether they are affirming, modifying, or reversing an
agency's decision.
Págan-Lisboa makes no effective counterargument either.
Selectively quoting a snippet from Melkonyan — stating
that the district court there "did not make any substantive ruling"
but "merely returned the case to the agency for disposition," see
501 U.S. at 98 — she suggests that before using his sentence-four
authority, the judge here had to first rule on whether she has
sufficient evidence to justify benefits. But as we said in the
last paragraph, Melkonyan makes it clear as glass that a sentence-
four remand is proper where the agency "has failed to . . . have
correctly appl[ied] the law and regulations." See 501 U.S. at
101. And that is exactly what happened in this case, as the agency
concedes.
Somewhat relatedly, Págan-Lisboa theorizes that because
she and Justiniano-Ramírez raise many "legal challenges," the
remand "back to the [agency] without first adjudicating [all] these
issues subjects [them] to piecemeal litigation" and thus makes the
sentence-four remand improper. Without passing on the correctness
- 19 - of what she says, we simply say that because she did not press
this theory in the opening brief but presented it only in the reply
brief, we consider it waived. See, e.g., Cruz-Ramos, 987 F.3d at
43. And the same goes for other appellate arguments not raised
until the reply brief — by way of example (and without limitation):
the claim that "[t]he court could also reverse without a remand
the agency's finding that the evidence shows reason to believe
that fraud was involve[d] in [her and Justiniano-Ramírez's]
cases."
As a last-ditch effort, Págan-Lisboa mentions a district
court rule that pertinently provides that "[u]nless within . . .
14 days after the service of a motion the opposing party files a
written opposition to the motion, the opposing party shall be
deemed to have waived any objection to the motion." See D.P.R.
Civ. R. 7(b). From there, she points out that the judge granted
the agency's remand request without giving her the chance "to
oppose the [agency's] motion" — and in doing so, her argument goes
on, the judge violated her "statutory" and "due process" rights.
She cites no caselaw to support her position, however. That of
course spells trouble because "developing a sustained argument out
of . . . legal precedents" is a party's responsibility, not ours.
See Town of Norwood v. FERC, 202 F.3d 392, 405 (1st Cir. 2000)
(noting that arguments made but not developed do not preserve
- 20 - issues for our review). And even if we were willing to overlook
that defect (and we are not), the only prejudice she alleges from
this supposed local-rule infraction is that she would have argued
that the judge did not comply with sentence four's requirements.
But as noted, we think the judge complied with sentence four's
requirements.5
Dismissal of Justiniano-Ramírez's Claims On Failure-to-Exhaust-Grounds
We can make quick work of Justiniano-Ramírez's claim
that the judge slipped in not considering his amended complaint,
which shows that he (Justiniano-Ramírez) had exhausted
administrative remedies. As the agency rightly concedes here,
Págan-Lisboa and Justiniano-Ramírez attached the amended complaint
to a motion that pertinently invoked federal civil-procedure rule
15(a)(1), which lets plaintiffs amend a complaint "once as a matter
of course" within 21 days of the original complaint, an answer, or
a motion to dismiss — and (to quote the agency) Págan-Lisboa and
Justiniano-Ramírez "timely" moved to amend. Because that rule
authorized the amendment, the judge had to accept it — meaning our
judge legally erred in not doing so, as the agency also concedes.
5 A quick aside: Responding to a post-argument order of ours, the agency wrote that it "has begun the process of reinstating P[á]gan-Lisboa's benefits at this time rather than upon remand to the agency." - 21 - See generally 6 Arthur R. Miller, Mary Kay Kane, and A. Benjamin
Spencer, Federal Practice and Procedure § 1480 (3d ed. 2020)
(noting that "Rule 15(a)(1) states" that a party eligible under
that rule "may amend a pleading once without the permission of the
court or the consent of the parties" (footnotes omitted)).
As for what to do about this, we agree with the agency
that the specific circumstances here require us to send Justiniano-
Ramírez's case back to the district court just so the judge can
accept the amendment and then (to again quote the agency) "remand
[his] case to the agency for new redetermination proceedings
permitting him to challenge the exclusion of evidence submitted by
. . . Hernández-González in his case."6
Waiver of Exhaustion Requirement For "Class Action Members"
There is not much to say about Págan-Lisboa and
Justiniano-Ramírez's claim that we should (emphasis ours)
"judicially waive the exhaustion requirement for all class members
that have not yet exhausted administrative review." A critical
premise of their argument is that the suit became a class action.
6 Another quick aside: Reacting to our post-argument order, the agency also wrote that as part of the new judgment for Justiniano-Ramírez, the judge "could also order reinstatement of benefits back to the date of the ALJ's redetermination . . . or to the date of the termination of [his] benefits" — something that the parties and the judge can sort out on remand. - 22 - But they make no persuasive argument that the suit ever did — the
record discloses no order granting or denying certification, for
instance, and they make no convincing claim of a possible implied
certification.7 See generally Navarro-Ayala v. Hernandez-Colon,
951 F.2d 1325, 1334 (1st Cir. 1991) (commenting that "[w]hile
express class certification is a fundamental requirement,
uncertified actions have on occasion been recognized as class
actions," like when the parties and the judge acted at all times
as if a class existed); see also Rodríguez, 659 F.3d at 175 (noting
that "we deem waived [arguments] not made or [arguments] adverted
to in a cursory fashion"). So their argument goes nowhere.
Wrapping Up
For the reasons recorded above, we affirm the judgment
entered below, with a single exception: as to Justiniano-Ramírez,
we vacate that part of the judgment against him and remand so the
judge can accept the amended complaint and then enter a new
judgment remanding his case (with Págan-Lisboa's) for a new
redetermination proceeding consistent with this opinion. All
parties shall bear their own costs on appeal.
So ordered.
7 Unsurprisingly, Págan-Lisboa and Justiniano-Ramírez's notice of appeal makes no mention of an order granting or denying certification. - 23 -