The opinion of the court was delivered by: QUACKENBUSH
Plaintiff, Rosa A. Coats, brought this action pursuant to 42 U.S.C. § 405(g) to obtain judicial review of a final decision of the Secretary of Health and Human Services (HHS). That decision denied plaintiff's continued entitlement to supplemental security insurance (SSI) benefits under Title 20 of the Social Security Act. The plaintiff moved for partial summary judgment and remand to the ALJ to apply the proper legal standard and the defendant moved for summary judgment. For the reasons set forth in this memorandum, the plaintiff's motion for partial summary judgment should be GRANTED; the defendant's motion should be DENIED; and the matter should be REMANDED to the ALJ for application of the proper legal standard. Additional evidence may be taken on remand.
In 1950, Congress established a program for assistance to "needy individuals eighteen years of age or older who are permanently and totally disabled". Ch. 809, Title III, Pt. 5, § 351, 64 Stat. 555, codified at 42 U.S.C. § 1351 et seq. (effective August 1, 1950, repealed effective January 1, 1974, Pub. L. 93-603, Title III, § 303(a), (b), 86 Stat. 1484). Upon approval of a state's plan by the Secretary of Health, Education and Welfare, federal grants were allocated to the states. 42 U.S.C. § 1353. Federal statute established broad standards for the administration of the program at the state level. However, since no national standard for determining eligibility was promulgated, each state established its own eligibility criteria.
In 1951, the Washington State Legislature adopted legislation implementing the federal disability program and authorizing the Department of Public Assistance to develop a state plan for Washington. Laws of 1951, Ch. 176, codified at RCW 74.04.010 et seq. The basic eligibility requirements for disability benefits were established by the Department and approved by the Secretary of HEW. For the purpose of establishing these eligibility requirements, the phrase "permanently and totally disabled" was defined:
the individual has some permanent physical or mental impairment, disease or loss that substantially precludes him from engaging in a useful occupation within his competence, such as holding a substantially gainful job or homemaking.
In October of 1972, Congress, in an effort to improve and make uniform these federally supplemented state disability programs, repealed Title XIV of the Social Security Act and established the federally-run SSI program. Pub. L. 92-603, 86 Stat. 1329, codified at 42 U.S.C. § 1381 et seq. (1974). The new program established uniform eligibility criteria. Under the new program, recipients under an approved state program as of December, 1973, were automatically "grandfathered" which meant they were eligible to receive SSI disability benefits beginning January 1, 1974. 42 U.S.C. § 1382c(a)(3)(E) (Supp. II 1972). The individual also had to remain continuously disabled.
On December 31, 1973 (one day before the SSI program was to become effective), Congress amended 42 U.S.C. § 1382c(a)(3)(E) to restrict the grandfatheree category to persons who had been receiving state disability payments before July, 1973. Pub.L. 93-233, § 9, 87 Stat. 947, amending 42 U.S.C. § 1382c(a)(3)(E). The purpose of the amendment was "to prevent the conversion to the Federal program of persons who in months immediately prior to the January 1974 changeover to SSI may have been improperly placed on the State aid to the disabled rolls". H.R. Rep. No. 93-871, 93rd Cong., 2d Sess. 2, reprinted in  U.S. Code Cong. & Ad. News/ 2808, 2809. Under the amended statute, those individuals ("rollback" cases) who had not received state disability payments prior to July, 1973, were required to meet the new federal disability standards to qualify for SSI benefits. The amendment did not change the grandfatheree's automatic eligibility for federal SSI benefits.
On May 22, 1972, disability benefits were approved for Rosa A. Coats, the plaintiff, under the then existing Washington State Aid to the Disabled program. (Ex. A of Plaintiff's Motion). In 1974, when the federal SSI program became effective, plaintiff was converted to the program pursuant to the "grandfather" clause 42 U.S.C. § 1382c(a)(3)(E). On September 9, 1980, plaintiff was notified by the Department of Health, Education & Welfare that her SSI benefits would be terminated because her disability ceased as of March, 1980. (Tr. 43) On January 30, 1981 a hearing was held in Spokane, Washington, before Administrative Law Judge (ALJ) John R. Hood. (Tr. 10 - 15). The plaintiff appeared personally and was represented by a paralegal from Spokane Legal Services Center. On April 29, 1981, the ALJ rendered his decision that as of March, 1980, the plaintiff was no longer disabled within the meaning of the federal SSI regulations. (Tr. 10 - 15). The Appeals Council adopted the ALJ's decision as the final decision of the Secretary on September 4, 1981. (Tr. 2 - 3). Mrs. Coats then filed the present action to obtain judicial review of the Secretary's final decision.
The issue in this case is whether the ALJ can evaluate a grandfatheree by the federal disability guidelines or if he must apply the state disability criteria. The ALJ used the federal guidelines set forth in the Code of Federal Regulations to determine plaintiff's ineligibility for continuation of SSI benefits.
Examination of the question indicates that a grandfatheree may be regularly evaluated but that evaluation must be made in accordance ...